The Study On The Relationship Between Auditor Size And Audit Quality

Presently, with the rapid development of global economy and professional accounting internationalization, the development of CPA circle has entered into a historical phrase. The scale of accounting firms will become a significant index to determine the trend of development in national accounting firms where wide scope and high level will turn out to be the future direction of their development. Owning to the special nature of accounting firms, the quality of its work directly influences a healthy development of the capital market. Therefore, the auditor size must ensure to improve the capital market's information quality , the development of auditor size must be to improve the quality of independent audits.However, in recent years, financial scandals and audit failures hit repeatedly the capital market at home and abroad. From some major financial fraud case, we easily find whether Andersen or zhongtianqin ,are international or domestic large accounting firms .Currently in China, are there different audit qualities among accounting firms of different sizes ,practical and theoretical circles have been controversial. This paper as a starting point to investigate the relationship between auditor size and audit quality and the decisive factor .Put forward the problem of accounting firms in the process of Large-scale development and the policy proposals that how to improve audit quality. At the beginning of the 21st century audit quality has been a subject of growing public concern , coming into this research has very important theoretical and practical significance .This paper is divided into five parts to discuss the relationship between auditor size and the audit quality and related problem. we conclude the relationship of auditor size and audit quality is influenced by economies of scale and Agents cost , these two factors'influence depends on the degree of perfection of audit market and accounting firms internal control mechanism. From the auditing supervision departments revealed the audit quality and CICPA statistics of the top 100 firms of disciplinary punishment ,We come to the conclusion auditor size and audit quality is not significantly positive correlation.The reason is there are some problems in audit market and firm's system of internal control ,These two aspects should be to improve audit quality.The innovations of the article conclude three sides:1. The introduction of the BSC to CPA circle balances the auditor size and audit quality; 2.Using game theory to analyze the influences of the health status of audit market and the degree of perfection of the internal control mechanisms to audit quality; 3.Put forward the suggestions of improving the internal control mechanisms.