The effect of CPA Firms, Audit Fee and CPA Rotation on Earnings Quality (Case Study: IT Industry in China)

In recent years, there are many researches on the relationship between CPA firms and earnings quality. However, the manipulation of profit and loss by listed companies still exists. Different from previous studies, this paper selects all the information technology industry of Chinas listed companies in 2019 as the research object, and uses the fuzzy-set/ qualitative comparative analysis method (fs/QCA) to explore the impact of accounting firm size, audit fees and accounting rotation on earnings quality. The results show that regular rotation of accountants and separation of two rights are the key factors to improve earnings quality. On this basis, small-scale companies in the development stage need to pay more public audit fees to obtain professional advice, but they do not need to hire large-scale CPA firms; For large-scale companies with system, the public audit fee should not be too high, and whether to employ large-scale firms does not affect the earnings quality; For a company with poor financial structure, it is not necessary to employ large-scale CPA firms and the public audit fee should not be too high.