Addministrative Penalty Negative Media Reporting And Audit Quality Improvement

Academic research on audit quality measurement indicators has been very mature,from early scholars to rely on the characteristics of accounting firms(size of accounting firms,etc.)to the results of financial reports or audit reports(audit opinions,earnings management,etc.)and the accuracy of information to measure audit quality.However,the recent high frequency of financial fraud has brought huge losses to investors,aroused high public concern and become the focus of public opinion.Relevant regulatory authorities have taken measures to improve the quality of audit and reduce the occurrence of audit failure.Our government mainly promotes the improvement of audit quality by means of accounting affairs that fail to be diligent and responsible in the audit process and administrative penalties imposed by certified public accountants.In recent years,China Securities Regulatory Commission(CSRC)has imposed more and more severe administrative penalties on accounting firms.Whether administrative penalties can play their supervisory and governance functions to improve audit quality has become a matter of great concern to stakeholders.Existing empirical tests show that government regulation,laws and regulations will affect the behavior of accounting firms and auditors,and then affect the quality of audit.Then what kind of influence the media will have on audit quality as an informal external environment factor,and what role it plays in the relationship between administrative penalty and audit quality improvement are the focus of this paper.Based on the empirical data of accounting firms,this paper uses Wen Zhonglin's test method of intermediary effect to study the impact of administrative penalties on audit quality improvement under government supervision,the impact of negative media reports on audit quality improvement under non-government supervision,and the administrative penalties,negative media reports and audits,taking all listed companies in China from2007 to 2017 as samples.The relationship among quality improvement.The research finds that:(1)Administrative penalty helps to improve audit quality,and the improvement of audit quality is related to the number and severity of administrative penalties imposed by the Securities Regulatory Commission on accounting firms,but not to the amount of administrative penalties imposed.It shows that administrative penalty can improve audit quality to a certain extent,and government supervision can play a governance role,but the impact is very weak.Further measures should be taken to enhance the impact of administrative penalties on the improvement of audit quality;(2)negative media reports are significantly positively correlated with the improvement of audit quality,indicating that negative media reports under non-governmental supervision can effectively play the role of media governance to improve audit quality;(3)negative media reports act as intermediary variables in the relationship between administrative penalties and the improvement of audit quality.Punishment can improve audit quality through media coverage and dissemination.The research results enrich the literature on Influencing Factors of audit quality improvement,and have reference value for strengthening government supervision and improving media supervision mechanism.Correct understanding and handling of the relationship between administrative penalties and negative media reports,reasonable guidance of public supervision,can better play the role of government supervision and governance to promote the improvement of audit quality.