Auditor Experience、Media Coverage And Audit Quality

As an important institutional arrangement of the market economy supervision system,independent audit can provide reliable and relevant economic information for the society,which is conducive to the construction of multi-level capital markets and the healthy development of the national economy.Under the background of China's economy entering a new normal,promoting quality and efficiency change is an inevitable requirement for high-quality development,and an important part of transforming development methods and optimizing economic structure.The high audit quality can reduce the information asymmetry of both parties in the capital market,help investors estimate the rate of return,judge enterprise value,and realize the effective operation of the market resource allocation function.Therefore,providing high-quality products is the key to auditing.And it is also the most concerned topic in the field of audit research.Audit quality is related to the characteristics of the listed companies and accounting firms,external environment factors can also influence audit quality,such as the level of the laws,the degree of government regulation and the level of market competition.As a “fourth party power”independent of legislation,judiciary and administration,the information dissemination and supervision functions played by the media have been widely recognized for a series of problems arising from the imperfect formal system.However,the impact of the news media on auditors,the discussion of the existing literature is not clear.In addition,the existing literature assumes that there is no difference between auditors when exploring the relationship between the media attention and audit quality.However,auditors have different experiences in practice.Their information sensitivity and information interpretation capabilities are different,which will inevitably lead to different effects of media on the quality of audited final products.And this is how this paper idea different from others.Based on the information asymmetry theory,setting agenda theory,silent spiral effect and reputation theory,this article develops the theoretical connection among the author experience,media attention and audit quality.Selects China's A-share listed companies as the research object in 2011-2016,measures the media coverage with the number of reports from authoritative financial media,and accruals earnings management as the substitute for audit quality indicators,this paper empirically studies the above theories through individual fixed effect models.The result shows that: First,the media's high coverage to listed companies can improve the audit quality.Second,the impact of different types of media and different content on audit quality is heterogeneous.When the media makesmore negative reports on listed companies,media coverage degree will improve the quality of audits.When the media gives more positive attention,media coverage will reduce audit quality.The politically-oriented media coverage can significantly improve audit quality,but market-oriented media coverage has no obvious impact on audit quality.Third,due to,the auditor's personal experience,the impact of media coverage on audit quality is different,The promotion effect between the two is more significant in the inexperienced auditor group.The results remain robust when the proxy of audit quality and experience of auditor be changed.This paper integrates auditor experience,media attention and audit quality into the same research framework,providing a new research perspective for audit quality influencing factors and expanding the field of media governance functions.The conclusions of the study can guide the market's attention to the nature of the media and the content of the report,and help to understand the effectiveness of the auditor's personal experience in the audit decision-making process.At the same time,it may also provide theoretical support for capital market investors to further judge the quality of audited financial statements.