Research On Listed Companies' Motivations In Accounting Firm Changing

The listed companies in China have the upper position in the Economic Game with the CPA firms. That is, when listed companies are unable to obtain their satisfaction with the report of the audit opinion, they could easily change another CPA firm aiming to obtain a more satisfactory report of the audit opinion. Just in this Economic background, the rate of changing accounting firms of China's listed companies happens more and more frequently. In 2009, China Association of Certified Public Accountants (hereinafter referred to as the AICPA) issued 2008 annual report of the audit Letters (No.15) showed that there had already been 158 listed companies which had changed their CPA firms, with growing trend in the next years. It is undeniable that China's Security Regulation Departments have positively taken effective measures to reduce the bad influence on malicious changes of CPA firms to purchase the audit opinion. But because China's listed companies could voluntarily disclose the relevant information, and the markets still lack the enforced laws and regulations, it results in that both China's listed companies and accounting firms did not strictly comply with disclosing rules or disclosed the information with no availability and materiality for the users of financial statements, so they could know the potential risk and adverse effects of CPA firms changing. Therefore, this paper sorts out the listed companies who change CPA firms in recent years, hoping to find out the main motivation of CPA firms Change and to assist regulatory authorities more timely and effectively.Based on a number of scholastic researches from China and all over the world, this paper combines the characteristics of China's securities market together and analyzes the current situation of CPA firms changing of China's listed companies. Above all, the paper is divided into four parts to conduct the research and analysis:Partl:Introductory and Literature Review. This section aims to describe the background and significance of studying on the CPA firms'changes of China's listed companies. Then it gives a brief introduction of researching methods and thoughts. The second part is related to the auditing theory, as well as the, describing the auditing definitions of different schools and the studies.Part2:This part conducts a statistical analysis on the listed companies of A-Shares, which changes the CPA firms in the period 2005-2008.It describe the difference on the company's statistics before and after CPA firms changes, including: Statistics on disclosure condition of listed companies, the change of the changing CPA firms, the change of auditing report after the CPA firms changing, the change of regional changes after the CPA firms changing, the change of auditing fees after the CPA firms changing, the financial situation of the listed companies who change the CPA firms. All of the analysis are the support to establish the regression model in the next chapter.Part3:This chapters use the 2007 A shares of all listed companies as samples and do motivation analysis to obtain the following conclusions:1. If a listed company and its former CPA firm does not belong to the same region, it is more likely to choose another CPA firm which belongs to the same region, influenced by the local governments.2. If a listed company obtained a non-standard unqualified audit report, it is inclined to change the CPA firms in the second year to get a more satisfactory auditing report.3. The greater the degree of earnings management, the more possible a listed company will experience a CPA firm change in the next year.4. The continuous cooperation between a listed companies and accounting firms is longer, it is more reluctant to change the CPA firms.Part 4.1n this part, the paper gives regulatory proposals to the regulation authorities, based on the result of the test.