International “Big 4” and High Audit Quality——A Research Based on the Perspective of Stock Price Synchronicity

Using Chinese listed companies data from 2003 to 2011as samples,the paper examines the issue that whether the internationalBig 4accounting firms(Ernst Young,KPMG,Deloitte,and Price Waterhouse Coopers)provide significantly higher audit quality than China's accounting firms based on the new perspective of stock price synchronicity.The empirical results show that:there is no significant difference for stock price synchronicity between the companies audited by internationalBig 4andnon-Big 4in China,indicating that the audit quality differences between them are not significant.Further test based on theBig 4accounting firms separately finds that the audit quality differences between Ernst Young,KPMG,Deloitte,and Price Waterhouse Coopers andnon-Big 4are not significant.Finally the paper divides the sample into several sub-samples in accordance with accounting standards,investor protection degree,the nature of the ultimate controller and managerial ownership,and finds that the audit quality differences are still not significant in a variety of different internal and external governance environments.