The Relationship between Accounting Firms Reputation and Earnings Management

• 1、Faculty of Management and Economics, Dalian University of Technology,dalian 116024

Abstract：Audit quality has important impact on constrainting listed company earnings management and audit quality and auditing firms reputation complement each other. This paper researches the impact of auditing firms reputation on company earnings management .This paper applies sample of 2505 that are listed on Shanghai and Shenzhen Stock Exchanges,objects auditor size and the degree of specialization of the industry as reputation variables of auditing firms, uses Ordinary Least Squares regression method to verify the relationship between auditing firms reputation and earnings management of listed companies.The research results are listed as followed.Auditor size and industry specialization are significantly negatively correlated with the extent of earnings management as reputation proxy variables,which indicates that auditing firms reputation can suppress the extent of earnings management.In addition,compared with non-state-owned enterprises,the two variables of auditing firms reputation show a more important role for earnings managementfor in state-owned enterprises,which shows that compared with non-state-owned enterprises,auditing firms reputation is more likely to suppress earnings management of state-owned enterprises.

Keywords： accounting earnings management accounting firms reputation nature of property right