The Research On The Construction Of Independent Audit Reputation Index System In China

Generally speaking, independent audit is an important part of information disclosure system in the capital market, which could help to improve the credibility of the accounting information disclosed by these companies. In the independent audit occupations, whether one can abide the independence, objective and impartial, abide the principle of independent audit of ethics, provide quality service consistently in long-term career, thereby to achieve the social public trust and praise, which relates to the survival and development of certified public accountants, so the reputation will become the important factors to enhance its competitiveness.The research for theory of economics has provided a deep foundation for the reputation research. From the viewpoint of the economic perspective, reputation is a kind of signal showing mechanism, which is transitive and can reduce the transaction costs, improve the trade efficiency and lubricate the transaction. Audit service is a special product, which has obvious differences from general products, especially in the visible the service part. The audit reputation, as an audit quality signal mechanism, can rise to limit signal distortion, enhance trading transparency and reduce transaction costs. For auditors, high reputation can enhance the credibility for their "high level of the effort", which makes them overcome the moral risk and avoid the invalid low effort equilibrium; and for investors, reputation mechanism can screen out the high quality audit service and make the price rise, and it also can find auditors that provide providing high quality auditing services accurately; and for the society, the reputation system makes the auditor to be more honest, thereby improving development level of the entire social.Audit market is different from general market, and one prominent feature is that its products is hard to check and measure. For the capital market investors, the competence and independence of the professional CPA are hard to realize specific identification and quantitative analysis, but the CPA’s reputation can work as an effective quality identification mechanism, and to a certain extent, their reputation becomes a kind of audit quality, which becomes marks for variable pricing according to audit service. And in many countries, the CPA can not work independently, they must join a group to perform their activity, so they need to consider the reputation of certified public accountants, In a rational auditing market, accounting firms with good reputations are usually considered to provide high quality audit, which means that through which the companies are easier to obtain the investors trusts, so as to obtain lower financing costs. And when its reputation damaged, investors will doubt on its audit quality, affecting the value of the company audited.Because the audit market in our country is still not well developed as to the abroad, and there have more problems, and the CPA’quality is not high. These produce serious credibility crisis, which has a tremendous hazards to the accounting firm all the investors. So the research on the audit reputation is necessary.The reputation of accounting firm is the tag of their quality of accounting, which shows the accounting level of information quality and the credible degree. But it is hard to measure the reputation of the accounting firm, Li Lianjun (2005) says:"the auditor reputation refers to the popularity in the market with auditors reputation. Visibility is often measured by the auditor’s market share, but the reputation is from the customers by words of mouth, so it is often hard to be measured directly." So this paper is committed to using questionnaire statistical analysis method to construct the independent audit reputation index system.To evaluate the reputation of independent audit, it need to measure, but the research on the reputation of the independent audit international and domestic is rare at present, and one want to solve these problems must solve the problems that how to construct the index system of reputation. So how to construct a reputation to meet the practical need to establish the independent audit supervision system, and accelerate the cultivating and developing of the independent audit reputation is the purpose and meaning in the paper.The innovation point of this paper is that in the selected topic perspective, determinate accounting firm reputation index system, which is a good example that use foreign related research results to research the problems in Chinese economic environment; in the study content, carry out the research on the content from the accounting firm determination of index system in the number, and deep the prestige factor for accounting firm reputation research; in the research method, make a integrated use of questionnaire (online surveys, E-mail), interview, statistical analysis, econometric method, and use public data and obtain confidential data, the result is more reliable; in research results, measuring accounting firm reputation provides theoretical basis and scientific thought in establishing long-effect mechanism; in practical application value, it can be applied to the reputation of the cultivation in the accounting firm, and applied to management accountants quantization supervision.The research method is divided into two levels. The first level is the overall research methods, they ran through the study in the whole process, and guide the research work, they include the main system method, behavior analysis method and induction method; the second level is the objective and concrete research methods, which include comparative research, questionnaire, quantitative research, etc. (1) The comparative study. Finished the comparative analysis to differences in accounting firm fame and credit, and credit, and make out comparative analysis of accounting firm and reputation, and contrast differences between accounting firm and company or enterprise reputation factors. (2) Questionnaire. Find some knowledge of some special accounting firm reputation factors through accounting firm stakeholders by the methods of interviews, research and so on. On this basis, according to the American "reputation business" index of the original questionnaire, and add some extensive effect evaluation index. (3) Quantitative study. Deal with the survey results using the methods of data processing and statistical analysis. Use analytic hierarchy process, determine the factors index proportion, get accounting firm reputation, and combining the evaluation index are factor score coefficient matrix accounting firm reputation factor index system.During the study, firstly define the independent audit scope and reputation in the former research, compare and analyze accounting firm reputation, and credit differences, comparative analysis of accounting firm and enterprise reputation differences. On this basis, according to the American "reputation business" index of the original questionnaire, considering the special influence factors accounting firm, join supplements that have extensive effect evaluation index in primitive questionnaire for accounting firm reputation, and draw up accounting firm reputation index, then draw up the questionnaire. In the next survey give these index further perfection. Through the questionnaire survey results, data processing and statistical analysis, the index system this paper determined is reasonable, using the analytic hierarchy process, determining the factors index proportion, getting accounting firm reputation, and combining the evaluation index.The author participated in the tutor’s subject research projects, with the help of human resources and theoretical results, combining with the relevant literature research on the independent audit reputation measurement indexes, construct a set of relatively complete measurement index system. Full text rounds about the index content, index weight and index relations, through questionnaire on the way, using the method of statistical analysis, and gradually analysis concluded that independent audit reputation measuring index system.Specific perspectivly, the paper firstly introduces the research angle and object, points out that the purpose of the research, the meaning and innovative points, and puts forward the research methods, especially points out the innovation in the selected topic perspective, research contents, the research methods and research results and practical value.Then, through the related literature collection, the paper reviews the relevant research results about reputation, especially the measurement research company’s reputation. We analyze the independent audit reputation, which will provide theoretical support in further research sufficient.And then it puts forward the thinking and design,and points out the research phase of the overall design ideas and questionnaire, the object selection, etc. In front on the basis of literature study, combining with an accounting firm’s actual situation, it proposes one class index and r two-level index that influenced the independent audit reputation, and illustrates the steps and process that how to obtain the first-order index and secondary indexes data.And then it instructs and analysis the survey data, using the method of factor analysis. From questionnaire data it obtains seven factors by extracting independent audit reputation:competition ability factors, overall feeling factors, audit quality and professional ethics factor, social contribution factors, inner strength factor, image factors and financial performance and scale factors. Using the methods of experts questionnaire survey and analytic hierarchy process, the paper determines the weight of the factor index. In each level, it determines the index of its influential factors affecting every second. Using the similar methods, it determines the weight of each factor index. Thus we get independent audit reputation measuring index system.Finally, this paper summarizes the whole study, puts forward some management advice, and points out some existing limitations of this study. To the future development, it points out the work for the cultivation and the accounting firm reputation management; and research on quantitative supervision of accounting firm; on this basis, do further work on independent audit reputation and the other aspects, to improve the auditing research level, etc.