The Research On The Relationship Between Auditor Size And Audit Quality

Since the reform and opening up, China's economy developed quickly. Because of the develop of economy, the function of audit becomes very important. The development of the economy in China has formed many large scale enterprise groups. At the same time, just because of the rise of these large enterprise groups, the work of audit is much more complex that some small-scale accounting firms can't do the work independently. Therefore, in order to adapt to the development of economy in China, in recent years, many accounting firms were on the road of mergering. Because of the mergering, now there are many large-scale accounting firms in china. Because of the particularity of the certified public accountants'work, the quality of their work directly influence the healthy development of the capital market. As we all know, the certified public accountants'audit has great effect on the implementing of the macroeconomic policies, maintaining the order of capital market, protecting interests of our investors and the public. So the quality of audit is the basic of the certified public accountants industry and is the guarantee of the quality information of financial reports. Therefore, the auditor size must ensure to improve the capital market's information quality, the development of auditor size must be to improve the quality of independent audits. But in China's capital markets, there are some audit failure cases, such as case qiongminyuan and yinguangxia. The accounting firms involved in these cases are all large-scale ones. However, the theoretical study abroad is generally considered that the larger the firm scale, the higher the audit quality is. But the reality in china makes the public to rethink the quality of audit of our accounting firms. Therefore, in the present context, the research on the relation between the auditor size and the audit quality is very important.This paper is divided into five parts to discuss the relationship between auditor size and the audit quality. Specific content as follows: The first part, introduction. This part mainly introduces the background, motivation, and purpose of the paper and then the research on the issue both at home and abroad is summarized.The second part, the theoretical analysis of the relationship between the audit size and the quality of audit. In this section, the article points out the most important factors that effect the audit quality, one is the professional competence of the audit staff, the other is the independence of staff who practice the audit work. Then we briefly introduces the audit quality substitution indexes. Secondly, defined the scale of Chinese accounting firms. Finally, with the theory of reputation and deep pockets and the features of the accounting firms itself. We analyze the theoretical relationship between the accounting firm scale and the quality of auditing. This part is the basis of the whole paper.The third part, demonstration about the relationship between the auditor size and the quality of audit. In this part, we adopt the regression analysis method and select the data of the listed companies in 2009.The research results show that undoubtedly there is a positive correlation between the accounting firm scale and the quality of auditing, but it's very weaker.The fourth part, the result of the regression analysis and the policies. In this part, the reason about the result is considered. At last, in order to improve the quality of our accounting firms, some suggestions is mentioned.