The Study Of Audit Pricing

The phenomenon of unreasonable audit price has been obvious in the listed firms in Chinawithout an available standard backed up by corresponding theories. China SecuritiesRegulatory Commission issued "The sixth publication on the norms of information disclosureby securities firms—the disclosure of the remuneration for the accountant house", whichorders that the listed firms should disclose the information in the annual report about theemployment and dismissal of accountant house and about the payment for the accountanthouse. As a turning point of the study of audit price in China, the public disclosure of the auditcharging increases the actuality of using empirical research method as well as providing aresort for the study of audit price in China. A systematic and effective research not onlyrestricts the behavior of "soliciting customers with a low price", preventing the viciouscompetition and promoting a healthy, orderly development of the industry, but assures theaccountant house of a profit in an appropriate account, improving the audit quality and ensurethe independence of chartered accountants. Based on the interest for audit price study and theattention on the practice of audit price, this paper is done with support of corresponding dataand information, hoping that through these efforts, a new perspective Could be discovered todeepen the knowledge on audit price in China and to find price model applicable for the auditcharging market, which would provide clues and help for future study.Through the combined method of theory study and empirical analysis, this paper consistsof several issues as follows: analyses the reality of audit industry from the perspective ofeconomics; study the relationship between audit price and audit quality as well as costs;elaborate the behavioral theory of "soliciting customers with a low price"; point out the realityand existing problems of audit charging on macro-level; finally, put forward severalsuggestions for improving the audit charging industry by comparison With other countries onthe institution of audit charging and the influential factors. For empirical analysis, the paperselects as samples the 348 listed firms in the stock market in Shanghai in 2005, making asystematic analysis of the influential factors for audit price based on the models in SPSS. Thestudy shows that four factors have eminent influence on the audit charging of the listed firms,which are the total assets of the listed firms, the number of the subsidiary companies, theranking of the employed accountant house and the changing of the accountant house. Finally,several suggestions are made for the improvement of audit quality and regulation of audit price.