The relationship between audit quality and performance of Chinese listed firms

Abstract

The purpose of this paper is to empirically examine the relationship between audit quality and firm performance. Following Al-Okaily and Naueihed (2019), in this paper, a regression analysis is used by examining the impact of audit quality on firm performance in Chinese listed firms. This paper finds that the audit fee and the audit company are positively and significantly related to Chinese listed firms’ performance. In the research, all data used in this study are obtained from CSMAR. It’s just one database of China. So, the data is not supposed to be quite complete. The evidence reported in this paper may be of use for investors, managers and minority shareholders concerned with firm performance and valuation. To the best of the authors’ knowledge, there are few studies of the kind to examine the relationship between firm performance and audit quality.