| Summary: | 碩士 === 東海大學 === 會計學系 === 96 === This study investigates the relations between CPA sanction and audit quality to view how the domestic disciplinary sanction system affects audit quality. Our study discusses audit quality from two opinions. One is from the investors, we analysis that the perceptions of the investors in the capital markets are good or bad when the competent authority do the sanction announcement. Another is from the auditors, we observe that after declaring the sanction announcement, the auditing behavior of auditors is better or not and promote the audit quality further.
Our test period is from 2000 through 2005 and test samples are the listed (TSE) and OTC companies which attest by auditors who declared the sanction announcement by the competent authority. In investors’ opinion, we use ERC proxy to measure the audit quality. In auditors’ opinion, we use discretionary accruals (DA) proxy to measure the audit quality.
The empirical results indicate that, after the competent authority doing the sanction announcement, the responses of the investors in the capital markets are better than before. It means that the audit quality of investors’ point is improved. Conversely, the auditor’s audit quality is not better than before. And no matter the degree of the punishment is serious or slight, the results can’t support that the auditors would improve their audit quality after the sanction.
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