Audit Service Characteristics and Formation of Audits Committees ¿Empirical Evidence of the China listed company

Abstract

Using nonparametric test and Logistic regression model, this paper selects China A-shared listed companies disclosed audit service price of annual report in 2003 as samples. From the auditor's characteristic visual angle, it examines the relationship between the quality and pricing of audit service and auditor-customer relationship and the formation of audit committees. The research finds that the quality of audit service is negatively significant correlated with formation of audit committees, the board's size and independence and the remuneration of independent directors is positively significant correlated with formation of audit committees, and the long auditor-customer relationship is not significant correlated with formation of audit committees. This find indicates that sufficient numbers of the board, promotion of the board monitor ability, the economical incentive of the independent directors, and audit service quality of the external auditors are significant factors affecting the formation of audit committees.