An Empirical Study On The Impact Of Internal Audit Quality And Audit Term On Earnings Management

In modern enterprises,the separation of ownership and management leads to the principal-agent problem.When the goals of business managers and owners are different,in order to safeguard their own interests,managers often use their own advantages over the control and information asymmetry of the enterprise,and use various means of earnings management to modify the financial statements,leading to the authenticity and reliability of the financial statements are greatly reduced,which seriously damages the rights and interests of shareholders and stakeholders.With the continuous upgrading of earnings management means,how to restrain earnings management behavior has become a hot issue of concern to regulators and academia.This research will study the relationship between internal audit quality,audit tenure and earnings management from the dual perspective of internal audit and external audit.Firstly,this study reviews and combs the relevant research literature at home and abroad,then makes a theoretical analysis of internal audit quality,audit tenure and earnings management,and puts forward corresponding research hypothesis.On this basis,we select the listed companies on the A-share motherboard of Shenzhen Stock Exchange from 2013 to 2017 as the research sample,and construct a multiple regression model to test the research hypothesis empirically.The results show that the relationship between audit tenure and earnings management is U-shaped,and the lowest degree of earnings management is in the audit tenure of about 7 years;the quality of internal audit has a significant negative correlation with earnings management,the higher the quality of internal audit,the lower the degree of earnings management.The quality of internal audit has an impact on the relationship between audit tenure and earnings management.The higher the quality of internal audit,the higher the turning point of U-shaped relationship between audit tenure and earnings management.Finally,according to the conclusions of this research and the actual situation of our country,this study puts forward relevant suggestions on audit tenure and internal audit construction from the macro-policy level and corporate governance level respectively.