Research On The Problem And Reason Of The Chinese External Audit Fee

According to the theory, as the payment for the CPA's special service, the audit fee should reflect the value of audit service reasonably. But there are many problems in the Chinese external audit fee, such as: the fee's low level, lack of generally recognized criteria for audit fee, incomplete announcement of the fee's message and unreasonable way of payment. These problems not only make audit fee deviate the service value but also cripple the CPA's independence and the quality of service.Because problems resulted by audit fee has become the fetters of CPA's development, it is the pressing time to resolve them. However the level of audit fee is decided by the nature and power of audit clients and CPA; wanting to find the reason affecting audit fee, we should analyze the supply &demand of audit service. From the view of demand, the stock market directed by government and the imperfect structure of corporate make the every body of stock market (such as, shareholders, creditors, supervisors and potential investor) lack the efficient audit demand and the same time result in losing the relationship's balance between the CPA, demander and corporate. On the one hand, defects in demand result in that demanders pay more attention to the service's price than its value; on the other hand they result in the action of CPA yield to the client's pressure. From the view of supply, the immature of audit market, defects in the way organizing CPA firms and short-comings in the CPA's internal control result in the inefficient supply of audit service. Inefficient service make CPA lack the motive to impose the audit quality and not to mention, audit service decides price according the quality given by suppliers. According to above analysis, the main reason resulting in problems lies in the inadequate of demand and supply and the unbalance of auditing relationships, which are rooted in the defect of macro and micro environment producing audit service.Analyzing the problem and reason of audit fee, the author thinks: wanting to resolve these problems, we could take efficient steps from two sides. Firstly, we should make scientific and reasonable criteria recognized by general, complete the system of announcing auditing message and put reasonable pricing audit fee model into practice. Besides these, in order to get the root of problems, we should improve the environment of demand and supply which can produce efficient supply &demand and keep the balance between clients, CPA and corporate.Reasons resulting in problems of audit fee have more, so resolving them is a long process and we need take systematic measures.