The Impact of Auditor Size and Abnormal Audit Fee upon Audit Quality: Large Sample Empirical Research Based on Regression Model

In the course of our country's economic development, the financial frauds and auditing failures remain rampant, which has aroused public attention and seriously deteriorated the healthy development of the capital market. The purpose of this research is to determine the factors affecting audit quality, and provide feasible and practical proposals to improve audit quality and promote the healthy development of the capital market. Aiming to Figure out the influence mechanism of abnormal audit fee on the audit quality, this empirical study investigates the influence of abnormal audit fee on the audit quality and the adjustment function of the audit firm size based on panel data from the Chinese A-Share listed companies from 2014 to 2018. We find abnormal audit fee is negatively and significantly associated with audit quality. Our results suggest that abnormal audit fee does harm to the audit quality, but auditor size plays a moderating role in their relationship, that is, large-size accounting firms can reduce the harm. Taking positive abnormal audit fee and negative abnormal audit fee into account, we find that both of them result in poor audit quality, while large-size accounting firms can reduce the effect as well.