Empirical Research On Performance And Strategy Of Industry Specialization In Chinese Audit Market

New audit standard and modern risk-oriented audit will promote CPA firm to reorganize their staff and practice by industry. And meantime, CICPA has encouraged CPA firm to grow bigger and stronger by industry specialization. Based on these, this dissertation wants to study on the performance and strategy of industry specialization in Chinese audit market.By the economics theory, this dissertation develops a theoretical framework for the existence and development of industry specialization: industry specialization is a division of labor and specialization trends, and in this trends, strategic management concept and modern risk-oriented audit has played a key role. Based on the theoretical framework, this study intends to figure out three questions: (1) the impact of industry specialization on the internal performance of Chinese audit market; (2) the impact of industry specialization on the external performance of Chinese audit market; and (3) the effect of industry specialization strategy in Chinese audit market, and how to implement industry specialization strategy.The research finds that: At first, there is significantly positive association between the industry specialization and efficiency of audit production, so the internal performance of the Chinese audit market will benefit form industry specialization. And then, industry specialization provides better audit quality for investors and higher audit fee for CPA firms, so the external performance of the Chinese audit market will benefit form industry specialization. At last, industry specialization strategy induce client prefer to select the dominancy of audit firms, so this strategy is efficient; otherwise, industry specialization strategy should take account of the industry characteristic of clients.The innovations and contributions of this dissertation as follows: (1) This paper firstly evaluates the efficiency of audit production in Chinese audit market by DEA method. (2) This paper validates the Learning effect of industry specialization by curvilinear regression. (3) This paper develops a theoretical framework for industry specialization. (4) This paper tests the performance of industry specialization in Chinese audit market form fully perspectives and provide empirical evidence for the policy of the new audit standards.(5) This paper firstly researches the strategy of industry specialization.