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at the majority of shareholders do not perceive NAS to impair independence. Francis and Ke (2003) report that the market valuation of earnings surprises is significantly lower for firms that exceed $500,000 in non audit fees and also pay more for NAS than the audit. Contrary to many recent studies, they find the economic impact to be substantial, with a 77 percent reduction in the market valuation of earnings surprises. Finally, Hackenbrack and Elms (2002) revisit the ASR No. 250 fee disclosures and find a negative association between stock returns and non-audit fees for sample companies with the highest ratio of non-audit fees.
These previous researches were mainly conducted by investigating non-audit fees. This reflects that the concerns over the NAS’s effect on audit services are due to the high fees rather than the nature of the NAS itself. In other words, if the NAS cannot provide high profit, it will not draw so many concerns. A Case study will be used to analyze the association between the NAS and audit independence trough the NAS’s characteristics in this article.    
Case Study
The Enron case will be analyzed in this study to answer the question as to whether the audit independence will be impaired by NAS. The Zhongtianqin case will be used to demonstrate the problems in the Chinese audit market and address the importance of NAS under today’s auditing circumstances.
The reason I choose the Enron case is that it is a typical case in the issue of NAS impairing audit independence. Although the Enron scandal is now many years past and seems a too well known case that too many articles and studies have already analyzed from different aspects, it remains the best choice as in discussing the NAS issue, the first case thought about is the Enron case. This is the same reason for choosing the Zhongtianqin case. The Zhongtianqin case has as great impact in China as the Enron case has in the US.

Both of the cases have been discussed too many times in China, which is evidence that those two are typical cases and therefore, the conclusion drawn through this case study will be more believable. Previous studies have only taken one of those two as a topic. There is no study comparing different cases under Chinese audit circumstances. This study will analyze both of them. All the data in this article is secondary data which was collected through internet and relevant articles.

Enron & Andersen
On October 16, 2001, Enron Corporation of Houston, Texas, one of the largest corporations in the world, announced it was reducing its after-tax net income by $544 million and its shareholders’ equity by $1.2 billion. On November 8, it announced that, because of accounting errors, it was restating its previously reported net income for the years 1997-2000. On December 2, 2001, Enron filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code. With assets of $63.4billion, it is the largest US corporate bankruptcy. Enron’s bankruptcy is of particular interest to accountants, because its longtime auditor, Arthur Andersen, LLP (Andersen), is (or was) one of the Big 5 CPA firms. It has been charged with gross dereliction of duty and even fraud by the press and members of the US Congress (amongst others), and is being sued in many lawsuits for very substantial damages. Critics have emphasized that, in 2000, Andersen was paid $2本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。