Does high audit quality enhance firms’ earnings quality - From the Perspective of book-tax differences?

• Main Authors: Hung-Chieh Ho, 何鴻婕
• Other Authors: 張敏蕾
• Format: Others
• Language: zh-TW
• Published: 2008
• Online Access: http://ndltd.ncl.edu.tw/handle/4hj223

碩士 === 銘傳大學 === 會計學系碩士班 === 96 === The main purpose of this research is to analyze whether audit quality influences the level of book-tax differences and components (permanent differences and temporary differences). Different from prior researches, which emphasize on the discussion of the relationship between audit quality and earnings management or book-tax differences and earnings management, we build the connection between audit quality and book-tax differences, and use book-tax differences as proxy of earnings management and earnings quality to discuss the relationship between audit quality and book-tax differences. The empirical results are as follow: First, there is a significant negative relation between the scale of CPA firm, auditor industrial specialization and book-tax differences. It means that the reported book-tax differences of the company audited by the big 3 and industrial expert CPA are much lower. Second, there is a significant negative relation between auditor tenure and book-tax differences. It means that when the CPA firm tenure is longer, they are more familiar with customer, so they have enough ability to detect fraud and earnings management, and lower the book-tax differences. Third, there is a significant positive relation between non-audit services and book-tax differences. Fourth, after dividing the book-tax differences into permanent and temporary differences, the relationship between proxies of audit quality and temporary differences are the same as the amount of book-tax differences except auditor brand name. On the other hand, the permanent differences of the company audited by the big 3 and industrial expert CPA firms are much lower, earnings quality is better, the same as the findings of amount of book-tax differences. Auditor tenure and non-audit services are not significantly related to permanent differences.