The Effect of Mandatory Audit Firm Rotation and Auditor Designation on Audit Quality of State-owned Enterprises

• Main Author: 欒品圖
• Other Authors: 林孝倫
• Format: Others
• Language: zh-TW
• Published: 2012
• Online Access: http://ndltd.ncl.edu.tw/handle/10854258561166749496

碩士 === 國立交通大學 === 財務金融研究所 === 100 === The Stated-owned Assets Supervision and Administration Commission of the State Council requires that central government-owned enterprises should have their audit firms rotated every five years, which is regulated in “Notifications about Publishing Audit Rules for Financial Final Accounts of Central Government-owned Enterprises” in the State-Owned Assets Development Valuation, 2004, No.173. In past studies, the impact of audit firm rotation and individual accountant rotation on audit quality is ambiguous, and whether mandatory rotation can improve audit quality is still a further issue left for discussion. In this study, we collect samples of central government-owned enterprises of China which have issued A-share, with a sample period ranging from 2005 to 2010. We apply logistic model in examining the significance of the experimental variables. The results are that only when the former audit firm exceeds the limited rotation years will the mandatory firm rotation of central government-owned enterprises improve audit quality, and that China’s assigning specific audit firms to central government-owned enterprises does not pose significant impact on the enterprises’ audit quality.