Office Tenure,customer Importance And Audit Quality

With the outbreak of the Enron incident,the United States introduced the SOX Act to regulate the audit industry.Since the 21st century,a series of financial fraud incidents such as Yinguangxia and Vanke Bio has emerged in China,and audit quality has received more and more attention.China has also issued relevant regulations regulating the audit industry.In particular,in the face of the impact of the audit term on audit quality,China has implemented a system of mandatory rotation of signatories every five years,and has also taken the lead in implementing the policy of rotation for business.However,as of now,the research conclusions drawn by domestic and foreign scholars on the relationship between audit term and audit quality are not consistent,so it is necessary to further explore.This article will start with the term of the firm to explore the relationship between its audit term and audit quality.The research value and practical significance of this paper are as follows:(1)Expand and refine the research on audit quality level,provide empirical evidence from transition developing countries to understand the impact of firm tenure on audit quality;(2)Make customers important Sexuality is included in the analysis model to further explore whether the importance of the client will have an impact on the relationship between the tenure of the firm and the audit quality.When examining the impact of the firm's tenure on audit quality,it is necessary to consider the adjustment of the importance of the client.The research ideas and research methods of this paper are as follows:Firstly,the literature research method is used to organize the literature of predecessors,to understand the current status of audit quality,and to specifically sort out the two types of literature on the impact of firm tenure and customer importance on audit quality.Then,using the theoretical research method,based on the theory of "two pressure sources",economic dependence theory,knowledge spillover effect,principal-agent theory and capital theory,the hypothesis of this paper is proposed.Through the empirical research method,the modified Jones model is established.Conduct correlation tests and regression analysis to test the relationship.Finally,it is supplemented by a robust test to test the correctness of the original results.This paper takes the 2015-2017 China A-share listed company data as a sample to study the relationship between the firm's tenure,customer importance and audit quality,and controls the net cash flow,total assets,asset-liability ratio,accounting firm of operating activities.The variables such as the scale and the type of the previous audit opinion are based on the firm's tenure(in years)and the size of the audited client(asset ratio)as independent variables,and study the changes in audit quality(the absolute value of the controllable accruals).In order to explore the relationship between the firm's tenure and audit quality,and whether the importance of the client will regulate the relationship between the firm's tenure and audit quality.Through empirical research,the paper concludes that the firm's tenure is negatively correlated with audit quality,and the importance of customers will strengthen the negative correlation between the two.According to the conclusions of this paper,several corresponding policy suggestions are proposed from the external environment,policy aspects and firm level.