Abstract:By studying the underlying factors leading to low quality audits at the individual auditor level, we find that before the audit failures are detected by CSRC, the quality of audits done by sanctioned auditors is significantly lower than those done by unsanctioned auditors in the same audit firm. The quality of audits done by some sanctioned auditors after moving to a better quality control environment passively because the audit firms merger would be better than those audits done before the mergence. It indicates that low quality audits are caused by personal characteristics given that all the auditors are constrained by the same quality control mechanism of the same audit firm. And an efficient quality control mechanism is able to limit the adverse impact of personal characteristics of stained sanctioned auditors on the quality of audits.