| After the implementation of the new securities law in March 2020,the number of listed companies is increasing,and the demand for annual report audit is increasing,but the threshold for accounting firms to engage in securities business is higher.Therefore,China will cancel the administrative license for accounting firms to engage in securities business,and implement the filing system instead,requiring accounting firms to file with the CSRC and the Ministry of Finance,so that they can enter the securities business market.The implementation of the "filing system" will enable more willing accounting firms to engage in the annual report audit business,promote the market competition of the CPA industry,and further deepen the implementation of the "streamline administration,delegate power,strengthen regulation and improve services" policy.Judging from the specific implementation of the filing system,the new system has stimulated the vitality of the industry market,and at the same time,there have been incidents in which accounting firms undertake the annual report audit business of listed companies with mismatched scales.Among them,Shenzhen Tangtang Certified Public Accountants Co.,Ltd.is the first non-securities qualified accounting firm to undertake clients of A-share listed companies and issue audit reports.The change of the firm was strongly concerned by the regulatory authorities.Shenzhen Tangtang received frequent inquiries from the regulatory authorities.After filing an investigation,it was finally severely punished by "no penalty for one",which set a record for the punishment of audit institutions in China’s capital market and aroused strong public concern.At present,the research on firm change at home and abroad is mature,but there are few studies on firm change under the background of filing system,and the research and analysis on the new situation are insufficient.This paper takes Shenzhen Tangtang and its A-share listed company customers as the research object,and studies the motivation and market reaction of firm change.Through the in-depth study of the case from the overall and individual levels,this paper finds that many accounting firms refused to accept the business of *ST company because of the non-standard audit opinions given by former accounting firms and the increasing regulatory pressure of the overall environment.In addition,due to the company’s own financial difficulties,the pressure of delisting has increased.In order to obtain satisfactory audit opinions,Xinyi and Sitai failed to successfully prevent listed companies from passing the resolution to change their offices in the case of serious corporate governance problems.Therefore,in order to protect their shells and avoid delisting,the actual controllers of the two listed companies chose the "obedient" accounting firm Shenzhen Tangtang after inflated profits;However,Shenzhen Tangtang Certified Public Accountants Co.,Ltd.chose to accept the annual report audit business of *ST Company in the highly competitive audit business market because of the irregular internal business undertaking,the wrong development strategy of the chief partner and the lack of audit independence,and the enterprises conspired to sell the audit opinions,which eventually led to the phenomenon that the accounting firm with the original securities business qualification changed to the small accounting firm with the original non-securities business under the severe environment.Through the research on the market reaction caused by a series of events brought by the change of the firm,it is found that the change of the firm not only affects the investors of the changed listed company,but also affects the investors of the industry and the investors of the listed company involved in the firm.In the four window periods of the study,although as expected,most of the window periods have negative market reaction,there are several window periods with positive market reaction,such as *ST Xinyi’s change window period in the firm,*ST Xinyi’s release of 2019 annual report and *ST Sitai’s release of 2020 annual report window period.In the end,the two companies inflated their profits and withdrew from the market.In these window periods,the positive market reaction meant that investors were misled by the company’s information and bought the shares of the two companies at a higher share price,and their interests were damaged.Finally,from the perspective of regulatory authorities,CPA industry and listed companies,this paper puts forward some suggestions to learn from the past. |
