Accounting Firm's Reputation、Stability Of Contract And Auditing Pricing

After the exposure of Enron incident,the United States Congress enacted the Sarbanes-Oxley Act in 2002,proposing audit rotation system.In 2003,Chinese Ministry of Finance promulgated the 'Provisions on the Regular Rotation System of Certified Accountants for Securities,Futures and Auditing Services'.In the following years,a series of policies all showed great importance to the accounting firm industry from the government.Also,through studying the researches on the reputation of the accounting firm,the stability of the contract,and audit pricing,it can be found that there are many studies between any two of them,but there are few studies of all of the three.Besides,the conclusions vary from each other.Under this circumstance,the study among the reputation of the accounting firm,the stability of the contract,and audit pricing has certain theoretical and practical implications.Based on this background,this article uses a monographic study to investigate the relationship among the reputation of the accounting firm,the stability of the contract,and audit pricing.It selects companies which changed their audit firm in 2010's annual report auditing as a sample.The ranking of the firm and the length of the firm's audit tenure are used to quantify the reputation of the firm and the stability of the firm's contract respectively.At the same time,theory and descriptive statistics are used to demonstrate the relationship among firm reputation,contract stability,and audit pricing.Finally,it is concluded that the firm's reputation is positively correlated with the stability of the audit contract.The stability of the audit contract and the audit pricing are positively related.The reputation of the firm and the audit pricing also have a positive correlation.At the same time,it is also found that the fees of the domestic firms in different years are more uniform.However,the annual audit fees of the Big Four have increased by a large margin and fees for the second year are higher than first year.Therefore,the intern Big Four have certain suspicion of low-balling.Based on the conclusions,this article puts forward some suggestions on the audit firm level,the company level and the regulatory level.At the same time,it also puts forward the improvement prospects for the future sample research of the thesis.