The Empirical Study Of Audit Quality And The Size Of Audit Firm

Recently, how to improve the audit quality is always the focus that is concerned in China, even in the world. And can enlarging the size of the CPA firms improve the audit quality? There are many different views in professional field. By combining theory study and demonstration research , This paper use both theory analysis method and empirical analysis method, and find that big audit firms have better professional ability, resource and motility to limit the opportunism financial report and rise the reliability of the profit, and then give some suggestion to promote enlarging the size of the CPA firms.Four parts are as follows.In the first part, we review the literature over audit quality of. We find there is difference in audit quality between big auditing firms and small auditing firms in the developed countries such as USA. However, such difference exists on the base of a series of serious hypothesis, including free competition in audit market, effective audit regulation, enough audit risk, and free information among audit clients. While the CPA profession in China is developed for a short time, the normalization auditing market does not exist. So, there is not condition though which difference existed in Chinese audit market. That is to say, whether audit quality of big auditing firms is higher or not in China in the current condition is needed to be tested.In the second part, we analyze the audit quality in the aspect of the theory.