Research On The Audit Market Effective Structure And Audit Pricing

Audit Pricing has always been the theoretical hot spot since professor Simunicfirstly elaborate it in his classical paper The Pricing of Audit Service:Theory and Evidence early in 1980's.Now the factors affect the Audit Pricing have been focused on at home and aboard,while,how to analyze the audit pricing in the audit market from the pricing mechanism has not been touched.This paper is discussed on the relationship of the effectiveness of the audit market structure in our country and the CPA audit pricing research.Combined industrial organization theory with a deep pockets theory,principal-agent theory,audit reputation theory,some findings of the new institutional economics researchand under the classical model S-C-P framework,the effective audit market structure is analyzed.Then on the basis of the audit pricing theory and the theory of audit risk,the relation of the effective audit market structure and audit pricing has been verified.From our unique system background,the paper,first of all,analyze the relationship of the effective audit market structure and audit pricing,and then by collecting and organizing data,it carried on the empirical analysis on the relationship.Finally,according to the theory analysis and empirical analysis,it put forward the relevant countermeasures to solve the problem,fully carries on the comprehensive study of the subject.The innovation can be list as follows:This paper applies"structure-behavior-performance",the structuralist paradigm of Harvard school to analyze the new correlation path to market performance.At the same time,based on the related theory of industrial organization in the market structure and the influence of the four important factors analysis,it carried on the thorough analysis of the audit market structure in Chinaand evaluate its effectiveness which enriches the audit market effective structural research.Scholars at home and abroad are mainly concentrated on the study of audit pricing problem from factors affecting audit pricing,and seldom consider from the perspective of the pricing mechanism which put the audit pricing problem in audit market.According to the theory of audit risk and structuralism analysis paradigm of Harvard school adhere to,the type of audit market structure will affect the cost of audit activity and audit risk level,which have directly impact on the audit market behavior and certified public accountants audit market behavior and ultimately make influence on the efficiency of the audit market-the audit quality and audit pricing.Therefore,audit market structure is divided into four elements--the market concentration,scale economy,market barriers and product differentiation which are taken into Simunic revised audit pricing model systematically.Through the related audit data collected from our capital market,the relationship of effective audit market structure and audit pricing mechanism is investigated by the empirical study.The result shows that the effectiveness of Chinese audit market structure is indeed an important factor that affect the level of certified public accountants.The paper adopted a new statistical method of audit pricing to study related issues.Intermediary effect analysis method is adopted,the mediation effect of audit quality is tested and the effective audit market structure on the influence of audit pricing path is further verified.