The Impact Of Auditor Reputation On Internal Control Audit Fee

The emergence of a series of fraud events such as Enron event and Worldom event prompted the US Congress to enact the SOX Act in 2002,which marks the internal control audit report of the US companies from the previous voluntary disclosure to mandatory disclosure.Compared with the United States,the construction of the system of internal control in China started relatively late.The Ministry of Finance and other four ministries jointly issued the "basic norms of internal control" in 2008,and its corresponding supporting guidance in 2010.It means that China begins to implement internal control audit step by step.As a result,the internal control audit of financial report of listed companies has become an important legal business of certified public accountants.As one of main income of accounting firms and new expense of listed companies,the internal control audit fee has arouse social concern.The influence factors of internal control audit fee are worth studying deeply.Based on the data of the A-share listed companies of Shanghai and Shenzhen Main Board(1)which carried out internal control audit for the first time during 2011 and 2012,(2)from 2011 to 2015,the paper portrays the financial report audit reputation and internal control audit reputation of auditors and exams the effects of the auditor reputation on internal control audit fee.In addition,the article also selects Grant Thornton Certified Public Accountants and Peking Certified Public Accountants in case analysis,to observe the relationship between auditor reputation and internal control audit fee and support the results of empirical research.The results of empirical research show that:(1)the higher the financial report audit reputation of auditors,the higher the internal control audit fee;(2)the higher the internal control audit reputation of auditors,the higher the internal control audit fee.In addition,the results of case analysis support the conclusion above and show that auditor reputation has a direct effect on internal control audit fee.The paper describes the auditor reputation from the perspective of the internal control audit reputation for the first time,and confirms the support of the auditor reputation to the accounting firm's internal control audit premium.The paper enriches the existing literature on auditor reputation and internal control audit fee.