Study On Evaluation System Of Accounting Firms' Audit Quality

Audit quality is always concerned by the social public. In recent years, people can hear complains on the low-quality auditing provided by national accounting firms from time to time. Audit fraud and audit failures were often reported too. So, how to evaluate the quality of auditing scientifically and to give accounting firms a reasonable guide to improve their audit quality becomes the top priority of the audit industry.In this paper, I start with analyzing the factors affecting audit quality, which are divided into three levels: First, a certified public accountant can find the issue of irregularities and mistakes or not, that's the practice of a certified public accountant's competence; Second, whether a certified public accountant could disclose the problems found in the process of audit, that's the independence of a certified public accountant; Third, there are other factors including the internal control system in an accounting firm, external supervision and supply and demand of auditing information. And then, we make use of factor analysis's powerful ability to summarize the main factors. Through add all there factor scores together we get the total scores-F of each accounting firms. What following it is a rank list of accounting firms based on the value of F. Finally, a new evaluation system is made out which is an improvement of "A Comprehensive Evaluation of the Accounting Firm Approach (Trial)" used by Chinese Institute of Certified Public Accountants.It hopes that through discussion of this article we can provide a scientific method to praise audit quality and it will be a great honor if it can provide some suggestions to improve our audit quality.