Auditors’ Organizational Form And Audit Quality

In July2010, the ministry of finance, state administration for industry and commerce jointly issued the temporary provisions "about promoting large and medium-sized public accounting firms to be special ordinary partnership organization forms", which requires large accounting firms for the conversion of special ordinary partnership form of organization before December31,2010, encourages medium-sized public accounting firm for the conversion of special ordinary partnership form of organization by the time of December31,2011. This importantly innovative policy will crack the bottleneck of the eager to become bigger and stronger. Through this transform, CPA firms will in the talent, brand, scale, technical standards, professional quality and management level in the leading position, which can "going out" to provide comprehensive service.Large number of various and medium-sized firms have positively response to this policy in order for the restructuring. Over the past2012years, the accounting firm, industry, at the same time of the "big four" speeding up the transformation, domestic firms have also raise the wave tide of conversion. By the end of2012, about ten domestic large and medium-sized CPA firms become the conversion of special ordinary partnership enterprises. However, whether the ultimate goal of the conversion can be achieved? After the conversion, the transformation really can promote the healthy development of the accounting profession which leads them to become bigger and stronger?It introduces the accounting firm’s transformation in our country detailed in this thesis, and states the enlightenment on our country. Meanwhile, the author also analyses the problems in practice and resolves them. It will be beneficial to the reality. By adopting the method of empirical research, we collect data on audits of Chinese listed companies from the period of2008-2012. From two aspects:the transverse and longitudinal study, we study whether domestic large and medium-sized CPA firms will really improve the quality of audit after the transformation.This thesis can be divided into five parts:In the first part, it gives an introduction of the history and characteristics of the conversion of the public accounting firm. Meanwhile, we study the theoretical significance and practical significance of this paper.In the second part, we review the history of the literature in this field, which mainly study the relationship between accounting firm’s organization structure and the real audit quality. To review the history of the literature leads to the focus of the article research in this chapter.In the third part, we mainly talk about the concept of accounting firm group and the different type form and audit quality and specification. One is to introduce the Chinese characteristics of the auditor’s legal liability. The other is to introduce the differences and relations between limited liability and partnership. It mainly introduces the question of how to measure audit quality in the academic circles, how to define audit characteristic, which provides the basic selects of audit quality standard in this article.The fourth part is importantly discusses the empirical research process, which contains assumptions, models, regression results and analysisAt last, it raises the resolution under the condition of intellectual economy.The innovation of the paper can be demonstrated in these aspects:Firstly, it gives a study of relations from two aspects:the transverse and longitudinal study. We study whether domestic large and medium-sized CPA firms will really improve the quality of audit after the transformation.Secondly, it considers the main factor which is that maybe audit client have already consider the audit firms those can satisfy the audit cost minimum and the highest utility.Thirdly, we chose three representative variables as substitute variables of audit quality. They are modified audit opinion, audit fee and the earnings quality; we deeply study and examine the firm and the relationship between the substitution variables by using SPSS respectively on their return, comprehensive analysis of the results.