Research On The Impact Of Internal Control Audit Expense Disclosure On Audit Quality

In the early 21st century,many financial scandals such as Enron and WorldCom in the United States frequently occurred,which led to the authenticity of accounting information quality of listed companies into a crisis of public trust.In 2002,the Sarbanes-Oxley Act was promulgated in the United States,which makes mandatory provisions for internal control audit and disclosure of audit reports.Subsequently,in 2007,the criterion of Internal Control Audit of Financial Reporting Integrating with Financial Statement Audit was promulgated.It was proposed that internal control audit should be carried out by the financial statement auditing office.The United States and other western countries began to disclose the audit fees of financial statements and internal control audit fees separately.However,the internal control audit started late in China,and it was not until 2014 that the listed companies on the motherboard began to implement the internal control audit in an all-round way.However,unlike in Western countries,the internal control audit carried out by accounting firms for listed companies can be either integrated audit or non-integrated audit.It does not require enterprises to disclose the information of internal control audit fees separately,but only comprehensive audit fees.Under this system background,some listed companies in our country do not disclose the audit fees of internal control separately every year,which makes it difficult to distinguish the specific fees of financial statements audit and internal control audit,and the charging information is not transparent.Because of the preference of listed companies for clean opinions,when internal control audit fees are not disclosed separately,there is an opportunity for managers to purchase audit opinions,which increases the possibility of abnormal financial report audit fees transferring to internal control audit fees,which easily affects the independence of CPAs to a certain extent.In addition,the cost itself can affect the audit quality to a certain extent,so the voluntary disclosure of internal control audit costs may also have an impact on the audit quality.In addition,there are few studies on voluntary disclosure of internal control audit fees.To sum up,it is of great practical significance to further study on the impact of independent disclosure of internal control audit fees on the integration of audit fees and audit quality.This paper consists of five parts.The first part mainly includes the research background and value significance of this paper.By referring to relevant literature at home and abroad and combining research ideas,the research methods are put forward.Finally,the innovation of this paper is highlighted.The second part introduces the concepts and theories related to the research contents,including the concepts and components of audit fees,the definition of audit quality and the selection of alternative variables.The theoretical part mainly includes information asymmetry theory,signaling theory,audit independence theory and game theory,and whether the audit fees of internal control under integrated audit are covered separately.Lu elaborated on the relationship between integrated audit fees and audit quality in detail.The third part is about the theoretical analysis and hypothesis of whether internal control audit fees are disclosed separately on the impact of integrated audit fees and audit quality.The fourth part is an empirical study based on 3515 data of all A-share listed companies from 2014 to 2017.The hypothesis of this paper is validated by referring to the existing research and audit theory of a large number of scholars at home and abroad and using descriptive statistics,correlation analysis and multiple regression analysis.The fifth part summarizes the conclusions of this study,and puts forward relevant suggestions and future prospects based on the author’s analysis.The results show that:(1)Under the integrated audit,compared with the listed companies which disclose the audit fees of internal control separately,the listed companies which do not disclose the audit fees of internal control separately have higher integrated audit fees.(2)Under the integrated audit,the absolute value of manipulative accrued profits of listed companies that do not disclose the audit fees of internal control is higher than that of listed companies that disclose the audit fees of internal control separately.(3)By using 2015 as the dividing point of the whole sample from 2014 to 2017,the further empirical research results show that,because there is no mandatory regulation for listed companies to disclose audit fees of internal control separately in China’s securities market,the problem of using audit fees of internal control not disclosed separately to hide audit fees of purchasing clean opinions of financial statements has become more and more serious.The worse the situation,the more obvious the impact on audit quality.