Audit Quality, Government Supervision And Economic Cycle

Since the U.S. financial storm spread to the world, the world economy suffered an unprecedented heavy blow, it also arouse relevant scholars' interest which is about the entire regulatory system problem. The supervision effectiveness problems' debate has been ongoing on the accounting and auditing market, and their research also has been the hot topic around the world accounting theory, practice and regulatory field. in recent years, So many people of the global academia make an explore and research related to audit quality and regulation, the research results show that proper regulation is conducive to improve audit quality, there are also many scholars were discussed the problem separately, however, most of these studies focused on the micro level, there are very few studies involves the macroscopic factors, It is impossible to ignore is that micro environment inevitably affected by the macro environment. Therefore, this article will break through the limit, adopt the method of combining theoretical analysis and empirical analysis and put the macroeconomic cycle into the research category, tries to explore the macroeconomic cycle how to influence audit quality and government regulation, to move forward a step, we study the effectiveness of the government regulation influence the audit quality under the influence of different stages of the economic cycle.From the audit quality, audit quality and the government supervision, the auditing quality, government regulation and economic cycle, use the way of stepwise to explore related literature at home and abroad, the paper expounds the theory of government regulation effect audit quality's mechanism of action, and analyze action mechanism between the three under the influence of the economic cycle, on the basis of mechanism analysis, this paper puts forward the research hypothesis, after searching China's Shanghai and Shenzhen Stock Exchange which companies on the A shares listed 2002 years ago, we screening out 719 listed companies as research samples, using their financial data from 2002-2012, analyzes the economic cycle at different stages, the macroeconomic act on audit quality and market regulation. The empirical results show that under different cycle, there is a difference of audit quality, audit quality in economic expansion is higher than systolic; In economic rise, the government regulation tends to decline, and in the economic downturn, market regulation is increased, in short, the government regulation in the economy is bigger than the systolic period, and the audit quality and regulatory although both affected by the economic cycle fluctuation, but the empirical research shows that whether on the economic expansion or on the economic systolic, regulatory implementation is advantageous to the increase of audit quality.