Research Of CPA's Audit Behavior Based On Audit Cost

With the development of CPA audit market, the competition of auditing industry has become more and more fierce. More and more CPAs who want to occupy the share in the competition market have to reduce the audit fee to attract clients. So how to reduce the auditing cost becomes very important. For this reason, CPAs need to reinforce cost management and improve working efficiency to control the auditing cost. However, the competition in our audit market is excess, which leads to"converse choice". The clients prefer to select the audit firm whose audit fee is lower, and they don't care about the audit quality. That means who has the lowest audit fee, who can occupy the market. But this is not good for our country. So it is necessary to start research of audit cost's influence on audit behavior, which can help us find out the rules of audit behavior, and solve the issues in our audit market.This paper's theory foundation is cost-benefit principle, certainty effect theory and concept of symbiosis. Meanwhile, this paper divides auditing work process into three parts from the viewpoint of cost to analyze accounting firms'and CPA's behavior at different audit phase, which means to help completely understand the behavior rules of CPA, improve working efficiency and quality, and reduce audit risk.This paper comprises 5 chapters. The structure and main points are listed as follows:Chapter 1: analysis of audit behavior and cost. This chapter expounds Audit behavior and audit cost, and analyzes the relations between them. This chapter's analysis is based on the hypothesis of the bounded rational economic man. Through cost-benefit analysis, the reciprocity between behavior and cost was found out.Chapter 2: Audit behavior analysis based on audit cost in competition phase. This phase contains assessment of client audit risk, audit price strategies, and whether accept audit commission, etc. At first, this chapter analyses the actuality of domestic audit market, and elicits the competition in our audit market is more and more fierce. Secondly, based on different audit working contents, this chapter analyses the cost influencing factors of audit price and audit risk. Thirdly, it analyzes the phenomena of low audit fee to find out the true reasons.Chapter 3: Audit behavior analysis based on audit cost in obtaining audit evidence. This chapter divides audit flow into three phases. At the audit planning phase, CPAs design audit procedure through the audit risk assessment and audit responsibility, which has influence on audit cost. At the implement phase, they carry through audit sampling based on audit control test and finish audit working paper. In this phase, CPAs choose different audit programs to reduce audit cost through audit test. At the accomplishment phase, CPAs will finish the audit report based on audit risk cost.Chapter 4: Audit behavior analysis based on audit cost in carrying out audit comment. Different audit comments can lead to different audit risk cost. This chapter analyses CPAs'different audit comments due to audit risk through the expected cost-benefit game research.Chapter 5: Several suggestions about standard audit behavior of CPAs. Through the analysis listed above of cost factors which affects CPA's audit behavior, the author finds out CPAs would probably make wrong audit behavior decision when they want to maximize their benefits. So three methods of standardizing CPAs'audit behavior are brought forward based on the analysis, including reinforcing industry's self supervision, which means establishing risk clewing system, carrying on compellent inter-checking system for the firms in same industry, setting up credit recording system for CPAs and accounting firms; enhancing government's supervision and management; Strengthening CPAs'self supervision and management.Looking over the full text, the main contribution of this paper is: The former researches mainly analyzed audit cost and audit behavior separately, and few research of audit behavior was carried on from the viewpoint of audit cost. As a marginal research of audit cost and audit behavior, this paper combines these both factors and analyzes CPAs'audit behavior from audit cost. This paper is from the angle of"the bounded rational economic man", takes the cost-benefit principle as the basic behavior guidance, certainty effect theory and the concept of symbiosis theory as the supplement, carries on the economic analysis to CPA, discusses different behavior choice reasons and influencing factors which caused by the different audit cost. Through the relations of these both factors, this paper this paper discloses the reasons and rules of audit behavior, which is helpful to enhance audit cost management ,improve audit efficiency, control and forecast audit behavior. This paper provides a research method for perfecting our audit theory system and instituting audit principle.