2 Literature Review

Undertaking the research questions and contents proposed and stated in Chapter 1, this chapter reviews the literature on the dual audit system, specifically, the definition and consequences of the dual audit system. Then, the literature on the cost of equity, specifically, the definition and determinants of the cost of equity is reviewed. Next, this chapter reviews the literature on audit quality, specifically, the definition and determinants of audit quality. Through reviewing relevant literature, this chapter points out the shortcomings of the existing studies and leads to their inspirations for this study.