主题：Allocation of Effort in Integrated Audits and Its Impact on Financial Reporting Quality

时间：2017年11月13日上午9：30-11：00

地点：B131

主讲人：刘馨茗

主讲人单位：台湾政治大学会计学博士

主办单位：999策略白菜手机论坛经管学院会计系、MPAcc中心和财务会计研究所

论文摘要：China’s 2012 Rule mandates that listed firms should disclose their internal control (IC) audit fees in the annual reports. Using abnormal audit fees to proxy for over- or under-investment in audit effort, China's new rule provides a natural experiment in which we can distinguish auditor's effort allocation in an integrated audit. This study examines whether IC over-reliance exists and whether this over-reliance leads to lower quality of financial reporting. An IC over-reliance exists if auditors' extra effort in IC audits cannot actually detect IC weaknesses (ICW). Because the auditors mistakenly believe over-invest in IC audits can help detect more ICW, they will under-estimate firms' control risk, resulting in reduced substantive testing and lower financial reporting quality. Based on a sample of 4,411 firm-year observations from the A-share companies listed on China’s stock exchanges during 2012-2016, we show that IC over-reliance exists and harms financial reporting quality when auditors charge positive abnormal IC audit fees and negative abnormal financial statement audit fees. These results are robust to controlling for endogeneity, alternative measures of financial reporting quality, and group-wise comparisons among different effort allocation combinations. However, this negative effect of IC over-reliance on financial reporting quality is mitigated when the auditors are industry experts. Our empirical results bear important implications to recent regulations and standards.

主讲人简介：刘馨茗，台湾政治大学会计学博士，研究方向为审计、公司财务。