And then the thesis chose modified cross-section Jones Model to discriminate if listed companies that had badly deficit and small profits used discretionary accruals to conduct earnings management.

Based on the relative financial figures and the audit figures of the listed companies in Shanghai Stock Market in this research,and with the Undated Jones Model to estimate the discretionary accruals used to measure the earnings management space of the listed companies,the authors conducted the empirical study on the relationship between audit tenure and earnings management.

In this paper,we chose 173 listed companies in Shenzhen Stock Exchange as research samples,took discretionary accruals as the variable of the quality of accounting information variable.

In the sample of auditor change firms in 2001 and 2002,we find the discretionary accruals are significant decreasing during the last year with predecessor auditor and generally significant increasing during the first year with successor.

Thus, an examination of changes in discretionary accruals around the hiring of a new CFO lends empirical evidence to the ability of the individual CFOs to significantly effect their firms\'reported financial statements.

The evidence shows that the discretionary accruals is strongly related to the leverage short change of company,that is to argue,the company with the higher level of earnings management is the higher total debt financing.

It is found that reformed firms and non-reformed firms have significant differences in earnings management: companies which implement share split reform perform negative discretional accruals in the quarter before the reform,and positive discretional accruals in the quarter after the reform.

The result shows that the listed companies audited by “Top 4” have lower discretional accruals and more significant relationship with stock return and future profitability.