A Study on Association between CPA’s Co-Attestation Number and Audit Quality in Taiwan

• Main Authors: HSUN-HSAIO LEE, 李訓孝
• Other Authors: En-Te Hsu
• Format: Others
• Language: zh-TW
• Published: 2014
• Online Access: http://ndltd.ncl.edu.tw/handle/59336676989726014699

碩士 === 東海大學 === 會計學系 === 102 === 　　Law of audition affect the environment of audition and cause the different of audit quality. Taiwan is one of the few countries which implement Dual Attestation system and the audit environment is quite different of the others. Under the Dual Attestation system regulations, financial reporting of listed companies should be audited and signed by two CPAs in Taiwan. For those CPAs who audit the same numbers of companies and the other cooperators might be different at CPA Co-attestation number. Hence, the relationship between Co-attestation number and audition quality is the important issue in Taiwan. Dual Attestation system has already implemented for over 30 years and there is no related study about this issue so far. This study is to make up the shortage. 　　The data from publicly traded companies in this study is based on the year 2003 to 2012. First, analysis the audit situation in audition market. Second, using the discretionary accruals as the proxy of audit quality to examine the relationship between CPA Co-Attestation number and audit quality. Last, according to the social network theory to explain the reason why the number of CPA Co-Attestation affect audition quality. 　　The results showed the Big Four audit 1,205 publicly traded companies (85%) of Publicly traded companies in the world) in the past decade. Which Deloitte occupied 477(34%), KPMG 292(21%), PwC 261(18%) and E&Y 175(12%). The others occupied 0.28%. In total CPAs is about 264 (63%) belong to Big Four. Which Deloitte has 109(26%), KPMG 66(16%), PwC 51(12%) and E&Y 38(9%). The others have about 3 in average and is like 0.7%. In Big Four, the amount of audit publicly traded companies and Co-Attestation numbers are much higher than non-Big Four. Furthermore, there is no fixed relationship between the average number of CPA Co-Attestation and publicity traded companies’ number. Which Deloitte is 3.5 CPA Co-Attestation and 8.5 publicity traded companies, KPMG is 3.8 CPA Co-Attestation and 8.6 publicity traded companies, PwC is 4.2 CPA Co-Attestation and 10 publicity traded companies, E&Y is 4.6 CPA Co-Attestation and 9.8 publicity traded companies. The others are 1.5 CPA Co-Attestation and 2.4 publicity traded companies on average. 　　In aspect of audition quality, The CPA Co-Attestation number is negatively associated with audit quality. After separating the sample to be Big Four and Non-Big Four. The CPA Co-Attestation number is negatively associated with audit quality to Big Four. And The CPA Co-Attestation number is positively associated with audit quality to non-Big Four. This study use social network theory to explain the difference. Through the centrality and structure hole to measure each CPA’s characteristic in social network to know the relation between CPA networks and audition quality. 　　The result showed CPA centrality affect the audition quality is different at Big Four and Non-Big Four. CPA’s centrality in Big Four is negatively related to audition quality, and vice versa. About CPA’s structure hole to audition quality is also different in Big Four and Non-Big Four. CPA’s structure hole in Big Four is negatively related to audition quality, and vice versa. In order to promote audition quality. Firm of CPA should consider the numbers of CPA Co-attestation number when assign audit CPA and implement quality control. Moreover, Authority should focus on the numbers of CPA Co-attestation and the difference between Big Four or Non-Big Four in Dual Attestation system policy.