Research About The Effects Of Penalties On Accounting Firms

With the continuous development and improvement of China’s capital market，the role of the auditors is increasing important，the Accounting Firms attracts moreattentions from investors. With the recent outbreak of the ancient Han Purple andGreen Earth and a series of financial fraud scandals, public trust in the audits hasgreatly reduced，in this context，the study of the Commission’s impact on AccountingFirms has theoretical and practical significance. This article provides empiricalevidence on effects of government regulation in audit market，prompts the governmentto raise the level of supervision and administration， to promote the healthy andsustainable development of our CPA.In this paper，we choose year from2007to2012，and collect penalty notices onaccounting firms to study the impact of administrative penalties acting on the behaviorof auditors and auditors. We use the theory of government regulation, auditing andauditor reputation theory and administrative penalties on auditor behavior. First，through strict criteria to select comparison samples，we use comparative analysis andvariance analysis to compare the clients number between the punished andnon-punished CPA firms. Secondly，through the establishment of empirical models tobe manipulated accruals and non-audit opinion audit quality as an alternativevariable，logarithm of audit fees as an alternative variable audit fees，administrativepenalties after CPA audit quality and audit to verify whether the cost changes， thequality of the accounting firm ’s audit results have improved after punished，audit feesdeclined， proved the administrative supervision of the audit market is efficient.Finally， we recommend that our government must continue to strengthen andcoordinate the efforts of the audit regulation，strengthening quality management andcontrol of the accounting firm，to further standardize the mechanism of CPA audit feesand penalties for violations of information disclosure，auditing better play the role inthe economic and social development.