The Research Of Organization Form Transformation And Industry Expertise With Audit Quality

Audit services are the core products of accounting firms,and audit quality is an important guarantee for accounting firms to maintain and expand market share.In recent years,the audit failure in the domestic and international audit market harm the guarantee for financial statement offered by independent audit.Therefore,how to improve the quality of audit is an important content of the accounting firms and academic circle.The auditor’s professional competence and independence are the key factors that determine the quality of audit.Professional competence is influenced by audit firm industry expertise,and the change of the system will affect the auditor’s independence.Considering our country is still in the early development of the accounting firm industry expertise,whether industry expertise can play a role in improving audit quality,and whether independence will influence the effect of industry expertise on audit quality is a problem,this paper is to explore this problem.This paper contains six chapters.The first chapter starts with the research background,illustrates the significance of the research,and points out the innovation and shortcomings.The second chapter summarizes the research contents and results of the previous research literature,and analyzes the research methods and ideas adopted by scholars,forming the research ideas and expected results of this paper.The third chapter points out the meaning of accounting firm restructuring,industry expertise and audit quality clearly,then analyze the influence of the industry expertise may have from different aspects and relationship between independence and professional competence and how independence influence the effect of industry expertise on audit quality.Finally,from the perspective of principal-agent theory,asymmetric information theory and insurance theory,the importance of high quality audit services and the urgency of improving the quality of audit services are analyzed.Based on the above analysis of the existing theory and result of literature,the fourth chapter theoretically analyzes the effect of industry expertise,conclude that the industry expertise can help auditors grasp industry knowledge and professional skills,make the auditors more easily find the earnings management behavior in the financial statements,more effectively control the audit risk to ensure the quality of audit services.The cost of forming industry expertise and reputation and customer resources the industry expertise has brought to the accounting firm make up for lack of independence and result in different degree of audit quality improvement beforeand after the change of system.This paper choose listed companies in Shanghai and Shenzhen stock markets and accounting firms in the past 2010-2015 years as the research samples,and sets up an empirical test model for two hypotheses respectively.The fifth chapter is the empirical test of the hypothesis.First of all,the descriptive statistical analysis and Pearson correlation analysis are carried out by using Stata12.0software,and the hypothesis is tested preliminarily.After using the method of multivariate regression analysis to examine the relationship of industry expertise and audit quality during the whole time and change of relationship between industry expertise and audit quality before and after transformation of system,we find that the accounting firm industry expertise can significantly improve the quality of audit services,effect is weaker after transformation of system.After that we test robustness of the empirical results.The sixth chapter form a conclusion based on the empirical analysis in fifth part.given that industry expertise level of the accounting firms in china is generally low and we are still in the early stage of development of industry expertise,we put forward some policy suggestions from two aspects: we shall expand the demand of the high quality audit services of capital market,improve accountant firm civil compensation protection system,encourage the accounting firms to develop industry expertise,so as to create a favorable external environment for accounting firms.What’s more,two to improve the professional level of auditors through the centralized training and diversified recruitment and implement strict quality control system to strengthen the internal management of accounting firms.The results show that:(1)after avoid influence of customer size,corporate governance,size of the accounting firms,we found that the accounting firm industry expertise can effectively decrease the earnings management behavior of the listed company,the accounting firm industry expertise has a significant positive correlation with audit quality;(2)professional competence of auditors can replace some effect of independence,the legal risk is weaker before transformation of system,but their industry expertise,The cost of forming industry expertise and reputation and customer resources the industry expertise has brought to the accounting firm makes the accounting firm have a strong incentive to public appropriate audit report,this effect is replaced after transformation of system,weakened improvement of audit quality by the industry expertise.