Research On Audit Quality After Reputation Damage Of Accounting Firms

For a long time,the audit quality of accounting firms has attracted much attention,which is the focus of scholars in the field of audit.However,due to the inherent information asymmetry in the audit market,the quality of audit services is difficult to judge intuitively,and it is even more difficult for investors to distinguish.In this case,if we start from reputation,we can greatly reduce the transaction costs of both sides,curb the earnings management behavior of the audited unit,and increase the transparency of financial reporting information.Therefore,reputation is often used as the basis for judging the audit service quality of accounting firms in the market.Therefore,enterprises will choose firms with high reputation in order to win the recognition of the market.Firms also have the motivation to establish,improve and maintain their own reputation.However,from the situation of the audit market in recent years,it has been repeatedly reported that the audit failure of accounting firms has been subject to administrative punishment,and there are many of them in the top ten.Since 2016,the government has strengthened the supervision of the audit market,but such a situation has caused the users of statements and audit reports to question the audit service quality of the firm: whether the firm’s reputation can still be used as the basis for judging its audit quality,that is,whether the reputation mechanism is effective;Whether the government’s strengthening supervision is effective,that is,whether the administrative punishment can promote the firms to improve the audit quality;What will happen after the reputation of the firm is damaged.In order to study the above problems,this paper starts with combing,analyzing and summarizing the theoretical basis and research results of relevant aspects at home and abroad,finds out the research space,and puts forward the research problem: the change of audit quality after the reputation of accounting firms is damaged.Then,using the method of case study,taking the time of the punishment announcement issued by the CSRC as the standard,Dahua accounting firm that was punished only once in 2018 from 2014 to 2020 was selected as the analysis object.Then,this paper selected the Da value of the auditee calculated by the most commonly used modified Jones model and the audit opinion issued by the firm(including the proportion of non-standard audit opinions and inappropriate audit opinions)As a measure of audit quality,compare the audit quality changes of Dahua before and after the punishment.Finally,it is found that the audit quality of Dahua has not changed significantly from the perspective of audit customer Da value,but from the perspective of audit opinion,the audit quality of Dahua has been improved to a certain extent,and then analyze the imperfections of policies,audit market structure and affairs The defects in the internal quality control of Dahua hinder the improvement of the audit quality of Dahua,and the psychology of Dahua to be bigger and stronger is conducive to the improvement of its quality.In view of these problems,this paper puts forward rectification suggestions from the three levels of policy,industry and accounting firm.This paper hopes to provide reference for the reputation management and quality management of accounting firms through the case study of Dahua.