TITLE:
Research on the Impact of Entity’s “Non-Professional Business” on Audit Quality
AUTHORS:
Zhenhua Cui
KEYWORDS:
Entity’s Non-Professional Business, Direct Entry, Indirect Entry, Audit Quality
JOURNAL NAME:
American Journal of Industrial and Business Management,
Vol.8 No.4,
April
13,
2018
ABSTRACT: Driven by the excess return rate, the entity
financial trends are becoming more and more intense, which the entity
enterprise carrying out financial and real estate business are often advertised
as “work outside”. In order to explore whether entity’s “Non-professional
Business” can influence the
audit quality or not, this paper takes A shares in the two stock markets of
Shanghai and Shenzhen between 2007 and 2016 as a sample to find out their
relationship. Entity’s “Non-professional Business” can be divided into direct and indirect entry
way. Direct entry way means the entity carries out related financial and real
estate businesses independently, while indirect entry means the entity buys
existing financial assets through the secondary market and other channels. The
results show that the direct entry of enterprises into the financial and real
estate business will reduce the audit quality. And enterprises in the way of
indirect entry into the financial and real estate business will improve the
quality of the audit.