Agency problem of listed companies in Taiwan is the ultimate master of shares by controlling shareholders control involved the company’s management, as important by management, directors or supervisors of the ways to control the company’s deci-sion-making, and ultimately controlling shareholders have the right to exercise control of the Board operation of the motive, so the addition of accountants elected by the di-rectors, supervisors, the impact will affect the ultimate controlling shareholder is one of the reasons employed accountant. But accounting firms for profit-making enterprises must compete with other firms for customers, so in terms of checking that there will be pressure from customers, and accountants in order to maintain relationships with cus-tomers, which may affect the audit quality. The main purpose of this study is to explore the ultimate controlling shareholder and the independence of directors and supervisors on audit quality.
The study sample selected from 2005 to 2009 listed companies in the sample data to discretionary accruals as a proxy for audit quality. Empirical results indicate that in-dependent directors and supervisors and the proportion of outside directors and audit quality seats have significant correlation, indicating when the company and outside in-dependent directors and supervisors accounted for all the number of directors the higher the board members, directors and supervisors of independence, the more they will not affect the accounting the adjustment of accruals, audit quality will be the better.
