The Study On The Influence Of Reform Of Audit Firm Structure On Audit Fees

In recent years, China’s limited liability accounting firms show the growing number of shortcomings in many aspects. In recent ten years, there are continuous occurrences of a series of fraud cases. In other hand, limited liability accounting firms are not conducive to firms to become bigger and stronger. So it is urgent for the limited liability firm to restructure. In2010, Ministry of Finance and other relevant departments jointly promulgated the "Provisional Regulations on the promotion of medium-sized accounting firm with a special composition in the form of special general partnership" to promote domestic and medium-sized accounting firms in the form of organizational change.This article is intended to study the accounting firm after restructuring, whether the audit fee will change. Hope the final results can improve the special general partnership system and make some policy recommendations, and promote China’s audit market norms.In this paper, use the theoretical analysis and empirical analysis methods and use the "deep pocket" theory, industrial organization theory, the risk-benefit theory, reputation theory. Then propose hypotheses based on theoretical basis, followed by Simunic model as the basis for empirical research. Empirical study was selected from2011restructuring of5domestic firms for the study, selected to be audited in2009-2012A-share listed companies as samples. By comparing the audit fees before and after the restructuring of the firm has been restructured and did an empirical test.Final conclusion:1, after the restructuring, the accounting firm audit fees increase over the previous conversion;2, audit firm change into a special general partnership compared to the previous year’s audit fees significantly increase the conversion of one year, compared to the previous year, the restructuring will significantly improve audit fees year after restructuring.The main contribution is, first, this paper select samples than previous studies and do supplementary of sample. This can make the research more convincing. Second, the duration of the restructuring would have an impact audit fees, the paper analyzed and compared with the situation a year ago the firm transformed conversion year, the firm restructured and restructured a year after the previous year’s audit costs rise. Third, this paper proposes some policy recommendations to the relevant departments.