Research On The Impact Of Audit Market Concentration Upon Audit Quality In China

Although our professional audit just walked for several years, going with the change of the negotiable securities market, it had developed so much. A series of problems appear in this process too. Especially in the 90's, some malignant case exploded. The accountant got into the biggest trust crisis. Professional audit become a social phenomena, more and more people pay their attention to it.This text begins with the economics theory, uses the criterion research and demonstration research. Exception the foreword, this text is divided into three parts. First, the foreword introduces the background. Second, it expatiate the research actuality and configuration.The first part is about the concentration ration. Firstly, we review the industry organization theories, and bring forward the textual theory basis. Contrast the various measures of concentration ration, and bring forward textual measure. Secondly, we analyze the date of 2004-2006. The result displays our concentration ration is very low. There are some reasons: 1. the excess competition;2.The big office is too small;3.The small office is too little;4.The serious section restrict. We can improve our concentration ration from three aspects. 1. Heightening the qualifications; 2.encouraging the office combination;3. Establishing reasonable withdraw mechanism, leading the unqualified office withdraw the market.The second part is about the specialization. Specialization is pay attention to one industry. The motive of specialization:1. The Society division;2. The assistant mechanism of reduce the audit risk; 3. The signal of high quality product; 4.Forming the competitive advantage. There are two methods accounting the specialization at present. But the text from another point of view, compare the concentration ration of each industry and entire market, summarize the specialization is low.The third part is about the connection of concentration ration and audit quality. Firstly, we analyzed correlation data and bring forward the hypothesis: the connection of concentration ration and audit quality is a conic. Secondly, we establish a regress model to prove the hypothesis. Thirdly, result show that we must increase our concentration ration.