Research On Audit Market Structure Of Share A In China

The independent audit is a bridge between investor and the list companies; which can improve the creditability, reduce the risk information between the two parties in the trade, and make the economic resources allocate effectively. If the CPA can't fairly carry out the financial report audit, his opinion will be invaluable. According to the "structure-conduct- performance" normal form in Industry Organization Theory, the structure deeply influences the audit product as the result of the accounting firms. So the market structure can be the way to study the problems such as the competition status and the performance.Firstly, in this paper, we review the study on the audit market structure, and bring the Industry Organization Theory to the audit market. Secondly, we use the Concentration Ratio to analyze the audit market structure of A share in China from 2003 to 2005. Finally, from the government authority and the accounting firm's measures we come up with the suggestions to build a dominative auditing market structure targeting the problems in our country.The main points and innovations: (1) The change of the A-stock audit market structure is studied, especially the change of the Big Four Auditors in Big Ten Auditors. The conclusion is that the Big Four Auditors improve the concentration degree, not the native accounting firms;(2) Through studying customer mean equity of the Big Ten Auditors, the Big Four Auditors enlarge the market share by auditing the clients of large-scale equity, but the native accounting firms broaden the market share through getting more clients on the quantity;(3) From the dynamic analysis, the mobility among accounting office is high. This means that the competition is severe, and the competitive advantage of the big accounting office isn't stable; (4)The concentration ratio in the various industries and the regional characteristics are studied, well the industrial characteristic isn't evident. To a great extent, the regional identity decides that the audit firms in the various industries difficultly form his industry expertise advantages.