Earnings Management, Audit Costs and Firm Size

摘要

The issue of earnings management of listed companies is increasingly concerned by scholars and has become a hotspot in accounting research. As the price of the supply and demand relationship between the accounting firm and the audited unit, the audit fee can reflect the enterprise's earnings management level to a certain extent. This article examines the relationship between earnings management and audit costs, examines whether accounting firms will conduct audit pricing based on different levels of earnings management, and further studies the role of accounting firms in adjusting the relationship between the two. This article uses the A-share listed companies from 2016 to 2018 as the research sample, and uses the OLS regression method for empirical research. The research results of the article show that there is a significant positive correlation between the earnings management level of listed companies and audit fees, and when the company chooses to conduct external auditing by firm which is not one of the top eight domestic accounting firms, this positive effect is more significant. The conclusions of the study can help investors better understand the information in the company's financial statements, provide theoretical support for regulatory agency policy reform, and further promote the healthy development of the audit industry and capital market.