The Association among Business Relatedness of Affiliated Business Groups, Auditor Industry Specialization and Audit Quality： A Perspective of the Frequency of Audit by the Same Audit Partner

• Main Authors: Chia-En Chen, 陳嘉恩
• Other Authors: 張瑀珊
• Format: Others
• Language: zh-TW
• Published: 2016
• Online Access: http://ndltd.ncl.edu.tw/handle/t625pt

碩士 === 淡江大學 === 會計學系碩士班 === 104 === This study explores the relationship between an affiliated business group’s business relatedness and the frequency of audit by the same audit partner, and tries to decide if the levels of the aforementioned phenomena are correlated to auditor industry specialization and audit quality. Empirical results indicate that there is a significant positive correlation between affiliated business groups’ business relatedness and the frequency of audit by the same audit partner. We presume that this is because business groups tend to place a priority over higher-quality financial statements than its trade secrets. We then further sorted and grouped samples, discovering that among these business groups, which were grouped by audit frequency, only those with a higher audit frequency have a significant positive correlation with an auditor’s industry expertise. Business groups, regardless of its business relatedness, have a significant positive correlation with an auditor’s industry expertise. This demonstrates that all business groups tend to hire industry specialist auditors. Another possibility might be that auditors who have to audit a large number of firms have been acquiring experience and skills and developing their industry expertise in the process. As to the audit quality, both “all of the samples” and “the business groups with higher audit frequency” exhibit a significant negative correlation between their business relatedness and the absolute value of discretionary accruals. This indicates that business groups with higher audit frequency and business relatedness tend to have higher audit quality. Research results will serve as evidence for business groups when they are having special considerations—audits of group financial statement. We also suggest that business relatedness and the frequency of audit by the same audit partner should be taken into consideration when assessing a business group.