The Effect Of Earnings Management On Audit Fees Evidence From The Chinese Automobile Manufacturing Industry

Since the beginning of 1980 s,earnings management has become an important field of empirical research in the academic field.Due to the high separation of ownership and management rights of modern companies,the agency caused serious asymmetry of ownership and management information,resulting in the phenomenon of earnings management.The impact of earnings management on capital market resource allocation and the interests of investors has become more and more significant.At the same time,the existence of earnings management will affect the audit activities,the audit risk and audit resources consumption will vary,the corresponding will be reflected in the audit fees.This paper first introduces the related research results of earnings management and audit fees in the literature review.Starting from the audit pricing theory,audit risk model and earnings management testing methods,this paper builds the theoretical framework of this paper.After the relevant data using the A shares listed on the automobile manufacturing company in the years 2011-2015,the relationship between real earnings management and audit fees,and affect the direction of real earnings management for this the empirical research on the relationship between.Multiple regression results show that earnings management and audit fees are positively correlated,which indicates that the existence and degree of earnings management will lead to the increase of audit fees.And higher quality auditors are less inclined to allow for the existence of earnings management.Finally,after summarizing the results of this paper,we analyze the significance of the results and the limitations of this study.