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《Chinese Journal of Management》 2008-02
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Audit Partner Tenure,Audit Firm Tenure and Audit Quality

SHEN Yuqing1 CHI Wuchun2 ZENG Yong1(1.University of Electronic Science and Technology of China,Chengdu,China;2.National Chengchi University,Taibei,China)  
Effects of the audit tenure on the audit quality in China were studied by investigating the effect of audit-firm and audit-partner tenure on two proxies of audit quality:(1) auditor's propensity to issue a going-concern audit opinion for distressed companies,and(2) the direction and amount of abnormal working capital accruals.For the former as the proxy variable,there is no linear relation between the tenure and audit quality.However,when we turn to use the latter as the proxy variable,we find that longer tenure helps to produce higher audit quality.Moreover,we find evidence that there exists knowledge spillover effect within audit firms when the clients have incentive to increase their earnings.A further analysis shows that the main previous finding on abnormal accruals is attributable to the non-Big 4 auditors,which implies that the positive effect of auditor tenure's knowledge and expertise is more important for non-big 4 auditors.
【Fund】: 教育部新世纪优秀人才支持计划资助项目(教技函[2005]35号)
【CateGory Index】: F239.0
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