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審計人員之產業專精與客戶租稅規避：中國實證研究
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Chinese CPA firms and foreign firms (Wang, Sewon, and Claiborne, 2008). Foreign
accounting firms have been allowed to establish joint ventures with local practitioners to
perform financial statement audits since 1992. From then on, the Big 4 entered and gradually
gained dominance in China’s audit market.
4
In order to improve the competitiveness of local
Chinese CPA firms over foreign firms, Chinese regulators
5
issued a series of policies and
guidelines to make local CPA firms bigger and stronger, and encourage local firms to
develop their industry expertise.
6
These policies greatly promoted mergers and
reorganizations of local CPA firms and provided opportunities for the development of
industry expertise. After several years of effort, recent studies (e.g., Han and Chen, 2008)
assumed that Chinese CPAs have developed auditor industry expertise.
2.2 Auditor Industry Expertise and Audit Quality
Audit quality is affected by both auditor independence and auditor professional
competence, and industry expertise is an important embodiment of professional competence
(De Angelo, 1981). Auditor industry expertise, including industry-specific knowledge and
experiences, helps auditors improve professional judgment and audit efficiency, thus
improving audit quality. Previous evidence from developed countries is consistent with this
assumption. O’Keefe, King, and Gaver (1994) demonstrated that industry experts are more
likely to follow auditing standards than non-experts; Owhoso, Messier, and Lynch (2002)
found a negative association between auditor industry expertise and financial report frauds;
Krishnan (2003) and Burnett, Cripe, Martin, and McAllister (2012) indicated that auditor
industry expertise can constrain clients’ earnings management. All these literatures suggested
a positive association between auditor industry expertise and audit quality.
However, the influence of auditor industry expertise on audit quality is not that clear in
the emerging market. Some studies even came to the opposite conclusion. For example,
based on the 2000-2003 Chinese B-share market, Chen, Su, and Wu (2007) argues that
industry specialization (proxied by market power) is positively associated with audit pricing
4 During the period 2006–2012, the Big 4 audit firms gained an average of 58.33% market share of A-share
listed companies, while the top 10 local audit firms in China gained only 24.47% market share.
5 MOF (Ministry of Finance), CICPA (The Chinese Institute of Certified Public Accountants), and CSRC
(China Securities Regulatory Commission).
6 Such as “Rules on Financial Audit for State-Owned Enterprises” (SASAC, 2004) issued by CSRC and
MOF, “Guidelines for accelerating the development of CPA industry” (SASAC, 2009) issued by MOF,
and “Policies of making Chinese accounting firms bigger and stronger” (CICPA, 2012).