Auditing Standards’Changes On Auditor’s Efficiency

The first purpose of auditing standards’changes is through a series of policy reforms to improve the audit quality of the firms, and to enhance the usefulness of accounting information, and to improve resource allocation function of the securities market. That can better protect small and medium investors’economic interests. The second purpose of auditing standards’changes is to eliminate institutional barriers that can reduce the transaction costs of economic exchanges between the emerging capital markets and mature capital markets to promote national economic development and increasing national wealth. The third purpose of auditing standards’ changes is through the establishment of the coordination with the international auditing standards to solve the problem of Certified Public Accountant in the international mutual recognition, so that Chinese Auditing forward toward the international track. However, the firms is a self-financing organization, it has always been in a dilemma. The firms should maintain its own independent to give objective audit opinion, but also fight for customers to obtain the economic benefits. If the firms only the emphasis on audit quality but neglect of the audit efficiency, auditors will lose the basis of survival. China issued the new auditing standards in2006, after the implementation of the new auditing standards, the auditor’s efficiency changes or not, how it changes, this article will conduct a theoretical analysis and empirical test.This paper first introduces the relevant institutional background and reviews the implementation consequences of auditing standards’changes as well as the auditor’s efficiency of the domestic and foreign scholars. After the paper analyzes various factors which affect auditor’s efficiency, the paper uses the theory of institution change to analyze the influences to the auditor’s efficiency of auditing standards’changes, combined with the characteristics of the new auditing standards after auditing standards’changes to determine the influences to the auditor’s efficiency of auditing standards’changes. Next, the paper use forty firms appearing in hundred best list and participating in the audit of listed companies from2006to2009as the study sample, to verify the impact on the auditor’s efficiency of the auditing standards’ change. The new auditing standards implemented from2007, this paper will uses2006as the period before the auditing standards’changes, uses2007as the transition period between the new and the old, uses2008and2009the period after the auditing standards’changes. The paper uses data envelopment analysis methods (DEA) to estimate the auditor’s efficiency. After controlling other factors that affect the auditor’s efficiency, in order to determining the auditor’s efficiency is improved or not after changing auditing standards, the paper compares the auditor’s efficiency in2006before changing auditing standards with the auditor’s efficiency in2008and2009after changing auditing standards. At the same time, the paper compares the auditor’s efficiency in2006before changing auditing standards with the auditor’s efficiency in2007to verify the changes of the auditor’s efficiency during the transition period. From the results of the study, the paper find that the auditor’s efficiency improved after changing the auditing standards(excluding the transition period), the auditor’s efficiency declines in the transition period but not significant. What’s more, in the robustness test by changing the study sample and the efficiency calculation method, the paper gets the same conclusion.This thesis can be divided into six parts:The first part is about preface. It introduces the research background, research significance, research contents and research method.The second part is about literature review. It introduces the implementation consequences of auditing standards’ changes as well as the auditor’s efficiency of the domestic and foreign scholars; what’s more, the paper comments them.The third part is about background and theoretical base. It firstly explains auditing standards’changes, describes the progress of auditing standards’changes and the characteristics of the new auditing standards after auditing standards’ changes. Secondly, it explains the auditor’s efficiency and analyzes various factors which affect auditor’s efficiency. It thirdly uses the theory of institution change to analyze the influences to the auditor’s efficiency of auditing standards’changes.The fourth part is about research design. It proposes the research hypothesis according to the third part and introduces the models and variables. Then it states in detail sample-selecting and data source.The fifth part is about the empirical tests. It shows the empirical tests results and verifies the influences to the auditor’s efficiency of auditing standards’ changes.The sixth part is about summary. It gets the research conclusions and suggestions according to troubles from sample-selecting progress and the research conclusions as well as it proposes study innovation and study limitations and brings forward future study trends.The research method is normative and empirical analysis. The thesis firstly analyzes various factors which affect the auditor’s efficiency, the influences to the auditor’s efficiency of auditing standards’ changes, and then demonstrates it by empirical tests.The main contribution of the thesis is that it straightforwardly studies for the first time whether and how auditing standards’ changes influence the auditor’s efficiency, and provides empirical evidence for the research of the auditor’s efficiency.