| Since the 1980 s,China has gradually opened up to the outside world,which has gradually transformed China’s economy from an initially closed economy to an open economy.In the mid-to-late 1990 s,China’s tax rate on import tariffs was further reduced,but China’s trade liberation was one-way and protected by the restrictions of non-traffic barriers and import trade rights.However,China’s foreign trade system has changed dramatically since China joined the WTO in 2001.So in this paper,I use the financial data of Shanghai and Shenzhen A-share listed companies to test the impact of import competition on accounting firm changes and its mechanism.Specifically,comparing the annual industry tariffs with the industry tariffs in 2001,we examine the impact of import competition on the replacement of accounting firms and propose relevant policies suggestion for the research results with a view of explaining the current situation of China’s import competition.Under the environment of increased tariffs and increased import competition,the study found that possibilities of accounting firm changes are low with the agency cost theory because management works harder to reduce agency problems between managers and owners.Moreover,enterprises with high concentration of industries,non-state-owned enterprises,and enterprises with internal control defects are more responsive in the face of the impact of import competition.To further analyze these phenomenon above,we focus on the direction of accounting firm changes and found that the type of accounting firm changes tends to keep the same scale or change from a large-scale firm to a small-scale firm.Under the effect of the agency cost theory,after comprehensive consideration,the company decided to choose a lower quality accounting firm,which further supported the conclusion that the import competition is enhanced while the probability of accounting firm changes are lower. |
