중국기업의 회계감사와 재무보고의 질

[Purpose]The purpose of this study is to analyze the effect of audit quality on financial reporting quality of Chinese listed companies. Specifically, the effect of the size of an accounting firm and the adoption of the internal control auditing on earnings management is analyzed. [Methodology]This study divides accounting firms into Big4, large accounting firms (Top6), and medium－sized accounting firms (Local) considering China’s accounting firm fostering policy. The quality of financial reporting was measured using discretionary accruals and real earnings management. In addition, it was analyzed whether the quality of financial reporting was improved by verifying the effectiveness of China’s internal control auditing system. [Findings]The empirical results are as follows. First, the size of the accounting firm was found to have a significant positive (＋) effect on the quality of financial reporting. This result means that the more companies audited by the big 4 accounting firms, the higher the quality of financial reporting because earnings management through actual earnings management is suppressed. Second, it was found that the introduction of the internal control auditing system had a significantly positive (＋) effect on the quality of financial reporting. However, in the case of the internal control audit system, the size of the accounting firm did not appear to have a significant effect on the earnings management. [Implications]Based on changes in the Chinese auditing market, this study is meaningful in that it analyzes the impact of auditing on the quality of financial reporting by size of auditing firm and examines the effectiveness and usefulness of China’s accounting firm fostering policy. In addition, by analyzing the effect of the introduction of China’s internal control auditing system, it provides implications for audit quality management and system improvement of Chinese accounting firms.