Author(s)

Shanshan Liu

Corresponding Author

Shanshan Liu

Abstract

Audit quality is the joint probability of CPA to find and report financial report errors or frauds, which mainly depends on CPA's professional competence and independence. This paper explores the impact of customer importance on audit quality from the perspective of CPA's independence. Based on the data of China's A-share listed companies and their main audit firms from 2015 to 2017, this paper studies the relationship between customer importance and audit quality, taking whether it is the "top ten" as an alternative variable of audit quality, and taking the proportion of audit fees charged by accounting firms to specific customers and the total fees charged by accounting firms to all customers as a sign of customer importance. It is found that there is a significant negative relationship between customer importance and audit quality.

Keywords

Customer Importance; Audit Quality; Audit Independence