The Study Ofaudit Firm's Formalization Development And Audit Quality

In June 2007, the CICPA published and implemented "the advice of propelling accounting firms to get bigger and stronger" and "the accounting firms' internal governance guidelines", fully started the accounting firms' strengthening strategy and supported local authorities and accounting firms in making useful practice actively. Under this background, the issue of accounting firms' scale-development and whether a larger accounting firm can provide high-quality auditing services becomes worthy of further study. This will alleviate the pressure of china' accounting firms' survival and development, promote them to participate in international competition and promote the development and growth of the entire industry.Firstly, this article makes the literature review on accounting firms' scale-management and domestic and foreign research on the relationship between accounting firms' scale and quality of audit, most scholars support the idea that accounting firms' scale-development can bring real economic efficiency and scale-development can improve audit quality, but some scholars have also come to different conclusions; then, this article makes a general theoretical analysis on the accounting firms' scale-development, uses the theory of economy of scale, the scale-management can make them to obtain advantages of economy of scale and reduce the cost effectively, makes demand analysis from the two levels of the external pressure and internal power of accounting firms' scale-development; then, this article makes the theoretical and empirical analysis of the relationship between accounting firms' size and audit quality, scale-development can effectively improve the audit staff's professional competence and independence, the empirical research makes statistical test by descriptive statistics, correlation analysis and multiple regression analysis on the 1753 samples by collecting the 2006-2008 listed companies. Results show that the bigger accounting firms can effectively identify and report the company's earnings management behavior, also confirms that accounting firms with bigger scale can provide high-quality audit services; by collecting and analyzing the published authoritative and industrial data this article makes a research on the current situation of accounting firms' scale-development and audit quality, including the scale-development process and ways, characteristics of accounting firms, difficulties and trends and the status of China's audit quality; Finally, combined with the problems in accounting firms' scale-development and audit quality, this article makes the relevant policy recommendations, including three aspects: how to set up a reasonable audit market structure, the value orientation of accounting firms' scale-development and development framework to think about strategy on accounting firms' scale-development.