Research On Property Rights、Reputation And Audit Fees

In order to improve audit quality and implement the strategy of "going out", The M inistry of Finance has issued "The notice of several opinion on accelerating the develop ment of China’s CPA industry by The Ministry of Finance" and " The interim regulation about reorganizing large and medium-sized accounting firms into special general partner ship ". According to the regulation, large accouting firm must be a special general partn ership accounting firm in December 31.2010.and medium-sized accouting firm was enco uraged to reorganize into special general partnership in December 31,2011.Can the special general partnership accountng firm become bigger and stronger? Can the special general parnership change behaviour of investor and management of accounti ng firm? Can the special general partnership accounting firm pay more attention to reput ation and provide higher quality audit service than the state-owned and limited liability a ccouting firm?Whether the ownership scale can also promote accounting firm to establish and maintain high reputation and to provide high quality audit service?Establishing and maintaining high reputation will spend more cost and will lead to increase audit fees?Th ere is no clear answer to these questions.To solve these problems,this paper study on infl uence of property right of accounting firm on reputation and audit fee under the backgro und of our special property right system and discuss the future way of CPA industry dev elopment in our country.On the study content,this paper is mainly divided into two parts:One is analysis of history research literature and theoretical basis of the accounting firm property rights、rep utation and audit fees.surrounding the question chain of how the property rights of acco unting firm have influence on establishing and maintaining reputation have influence on audit fees,this paper use deductive reasoning method,comparative analysis method,case a nalysis method,and use property rights theory,principle-agent theory,insurance theory,indus trial organization theory,rent-seeking theory and game theory,deeply discuss the question a bout behaviour of investor and management of accouting firm in different nature of prop erty rights of accounting firm,reputation demand and supply,reputation incentive and con straint,audit cost and audit fees,the relationship between accounting firm property rights a nd reputation,the relationship between accounting firm property rights and audit fees.The other is to test empirically the influence of the nature of accounting firm property right s on reputation and audit fees and the influence of ownership scale of accounting firm o n reputation and audit feesAround the above accounting firm property rights chain,this paper defines the definit ion of accounting firm property rights,reputation and audit fees again. Through theoretical analysis and empirical test,this paper draw the following conclusions:in the different nat ure of accounting firm property rights, different rights,obligations and responsibilities betw een investors and management will be produced.Different accounting firm behaviour will be produced accordingly. Only when the audit market have the demand for high quality audit services,The accounting firm will have enthusiasm and provide high quality audit se rvices consistently,so as to maintain the good reputation.The competition between accounti ng firms would lead to high reputation accounting firm to weed out low reputation acco unting firm.At present,the audit market structure type belongs to the monopoly competitiv e,which means that the accounting firms have some bargaining power,have stable profit e xpectation,will pay more attention to establish and maitain reputation,pay more attention t o the quality of audit services,receive more audit fees for more audit cost spending from customers.Accounting firm reputation can restraint rent-seeking for auditing collusion and rent-seeking for auditing competition.Special general partnership accounting firm can est ablish and maintain good reputation and receive more audit fees than limited liability ac counting firm.In the limited liability accounting firm,the larger the ownership scale of ac counting firm,the higher the accounting firm reputation,the higher the audit quality and t he more audit fees accordingly.