Research on the Relationship between Internal Audit Externalization, Executive Power and Audit Quality

Audit quality is divided into internal audit quality and external audit quality, and the independence of the former has always been weaker than that of the latter. By selecting the two variables of internal audit outsourcing and executive power, combined with the method of empirical research, we compared the above two variables with audit quality. We will study the relationship between them and explore measures to strengthen audit independence from two perspectives, ultimately achieving the effect of improving audit quality. Based on the collation of domestic and foreign literature on factors affecting audit quality, this paper studies the relationship between internal audit outsourcing, executive power and audit quality, defines the concepts respectively, and determines the theoretical basis required for the research. From three Starting from the relationship between variables, a total of three hypotheses were put forward. An investigation was conducted using A-share listed companies in the Shanghai Securities Market from 2014 to 2018 as a research sample. Based on previous research, appropriate methods were selected to quantify the three variables and establish a model. Through empirical analysis, all three hypotheses have been verified. The first conclusion is that executive power is negatively related to corporate internal audit quality, that is, the greater the executive power, the lower the audit quality. The second conclusion is that internal audit outsourcing is positively related to audit quality, that is, the more reasonable the allocation of internal audit outsourcing services, the higher the audit quality. The third conclusion is that internal audit outsourcing will inhibit the negative relationship between executive power and audit quality.