Abstract: Most of previous literatures about auditor change address the change of audit firms, but less concerns about the change of signatory CPAs. This study examines audit quality of listed companies having changed auditors but staying with the same signatory CPAs. Among all the substantial and voluntary rotations in China's capital market, those firms staying with the same signatory CPAs are referred to as "Clients Following Signatory CPAs, or ‘following’ for short". We examine audit quality difference before and after the "following" event, as well as the audit quality difference between these core samples and the remaining voluntary rotations. Both results from time series analysis and cross sectional analysis show that clients following signatory CPAs exhibit a better audit quality. Specific analysis based on the sign of abnormal accrual show that there is no statistical evidence that these "following" firms have earnings management incentive. Still, clients with small previous auditors see significant improvement in audit quality. All these results indicate that clients following previous signatory CPAs are more likely to be due to concerns of audit efficiency or audit quality, not due to earnings management incentive, nor "collusion" or "collaboration" with auditors. From a unique perspective, this study suggests that longer tenure may contribute to a better audit quality.

Key words: auditor change, clients following signatory CPAs, audit quality