An Empirical Research On The Influence Of Audit Rotation And Tenure On Audit Quality

The level of audit quality directly affects whether the audit report is true or not.This paper studies the effect of audit rotation and audit tenure on audit quality.The research background is based on the fact that the signing CPA mentioned in the Regulations issued by the Securities Association and the Ministry of Finance in 2003 continuously provided audit services for a relevant organization.It must not exceed five years.Whether this provision can achieve the purpose of improving the quality of the audit does not include It has been unanimously recognized by academic circles at home and abroad.At the same time,it has been 15 years since 2003.The effectiveness of the audit rotation in China has also been studied.This stude first discusses the audit rotation by reading the literature,the term is how to influence the audit quality through the independence of audit and the degree of audit specialty,sum up the substitution variables used by many scholars to study the quality of audit,and finally choose to use the controllable surplus to study the substitution variables of audit quality.By using the method of empirical study,we selected 2010-2015-year listed companies as samples to study and established 3 main models for regression,aiming at the influence of audit tenure on audit quality and audit rotation on audit quality.The results from the whole sample group show that there is a significant relationship between audit rotation,tenure and audit quality,the former is negative relationship and the latter is positive correlation.Moreover,the regression results were validated by the method of adding control variables to the regression results,and the variable of the initial audit rotation was added to model 1 as an explanatory variable to verify the change of the controllable surplus in the first and second years after the audit rotation.The quality of audit has been improved by the growth of tenure,and the change of accounting firms has led to an increase in the number of operating surpluses and a decline in audit quality.Although in the 2 years after the audit rotation,the effect of audit tenure on earnings management is not significantly related to the observation,but it can not be the same as long term of earnings management obvious inhibition.Add an audit term to model 2 to see whether the impact of the audit rotation on the controllable surpluses will change.The results have not changed.It also divides the sample into state-owned,private and other,discusses separately,obtains the state-owned enterprise to have the small surplus management motive compared to other enterprises,the auditor and the firm’s independence that the audit request does not reduce,the audit ability in the audit process role manifests more obviously.Finally,it proposessome suggestions on how to increase the concentration of audit market and strengthen the standard of information disclosure,etc.