Study Of Shinewing Restructuring’s Effect On Audit Quality

With the 1978 reform and opening up to now, while the market economy with Chinese characteristics is more and more prosperous, the public’s demands to auditing quality of China’s Listed Companies are increasing. However, the more rapid development of CPA, the more the organizational forms of accounting firms with Limited liability will gradually reveal its shortcomings. Such as lower liability under the limited liability partnership, investors have a number of limitations, and Double taxation for corporate income and personal income. To make up for all the disadvantages of accounting firms with Limited liability, Ministry of finance and the SAIC Published the Provisional Regulations on the promotion of medium-sized Accounting firms with Special General Partnership in 2010.Although domestic scholars have studied Accounting firms restructuring-related issues, but basically they focus on the advantages of special general partnership and the need for restructuring of Certified Public Accountants.In this paper, the SHINEWING is the case and we focus on the impact of the restructuring on audit quality. Firstly, I analyzed the research background and significance of this paper. Secondly, I collated and summarized the researches on the audit quality, the firm organizational forms as well as the relationship between the two documents at home and abroad. Thirdly, I introduced the evolution of the organization in the form of accounting firms, the concept of audit quality and the restructuring’s effect on the audit quality one by one. Then I emphatically studied the impact of SHINEWING restructuring’s effect on audit quality from the three angles of the proportion of non-standard audit opinions, the extent of earning management and AICPA practicing quality inspection reports.The main conclusion:firstly, descriptive statistics and independent sample T test for the proportion of non-standard audit opinions show that the audit quality of SHINEWING have been changed and improved significantly after completing the transformation of accounting firms; secondly, the DA values for the degree of earnings management have shown a downward trend after SHINEWING finished the organization reform of accounting firms, which indicate the audit quality has been significantly improved through median test; thirdly, we find that the audit quality is getting better and better after 2011 through the analysis of the quality inspection report. So, we believe that it is necessary to transform the form of the accounting firm, and the special general partnership should be the popular trend in the development of CPA profession. In order to accelerate the improvement of special general partnership and further play a positive role in improving the audit quality, we give some suggestions from the perspective of internal and external of the accounting firm in the end.