Research Of Relationship Between Listed Companies' Audit Risk And Audit Fee

It is an indisputable matter that audit risk costs should be compensated in the price of the audit. Many of Foreign researches have proved that audit risk can affect audit pricing. However,many Certified Public Accountants in china do not think about audit risk when they decide price of audit. On the other side,a lot of litigations about audit have appeared. How audit risk costs are compensated in the price of audit has become a theory and practice pressing concerns. In this paper,based on the actual situation of China's social audit,a in-depth study of the China's accounting firm audit risk costs compensation system is performed to provide important protection for regulating accounting firms audit risk and price management,and improving relevant laws and regulations.The problem of price compensation of audit risk costs have been studied from the following aspects:first,starting with the meaning of the related concepts of price compensation of audit risk costs,based on the background and significance, discussed the necessity of this research. Second,with the characteristics of China's auditing market,this paper tries to find out the reason of audit risk and audit pricing. Then,this paper study revealed the theoretical basis for audit risk costs compensation;Third,by referring the classical literature from home and abroad and the China's auditing market characteristics,the paper proposed theoretical model assumptions of audit risk costs compensation by the method of Deduction,set the corresponding variables,and eventually built the model;Forth,based on the collection information of China's Shanghai A-share listed companies in 2009,the paper performed an empirical study.This paper eventually drew the following conclusions:accounting firms don't think about audit risk in a comprehensive way,when they confirm the price of audit. This paper presents the corresponding policy recommendations,establish a model of audit risk costs compensation under appropriate government supervision,increase government supervision on the Corporate Governance of listed companies,advocate the forms of organization of limited liability partner ship accounting firms,establish of audit risk management system and perfect the system of civil compensation.