The Effect Of Auditor's Characteristic On Audit Pricing: Based On Accounting Firms

China Securities Regulatory Commission specifically requests the listed companies disclose auditing fees as an important matter in the annual reports. This behavior provide an open platform for the majority of information users for understanding the audit services, as well as an opportunity and a basis for academic workers to study audit pricing. As a provider of audit services and audit price makers, accounting firm with hidden social supervise responsibilities, its independence and audit pricing is particularly important.This paper based on the system background and theoretical analysis of audit pricing, and consider the previous academic research, classifies audit pricing factors into four categories:customer characteristics, auditor characteristics, market characteristics and other characteristics. Of this classification, using accounting firms which audit Chinese Listed Companies as our sample, selected relative data in 2005, using multiple regression model, and take audit fees for audit price of accounting firms, testing the impact of auditor's characteristics, market characteristics and total customer features on audit pricing. The results are:1. Of auditors'perspective, auditor's industry specialization, audit market share and the "International Big Four" accounting firms have significant positive effects on audit pricing. Reflecting the cost of clients, total customers scale and complexity of their business have significant positive effects on audit pricing, too.2. Of listed companies' perspective, the employed accounting firm's audit market share, industry specialization and the "International Four" cooperation are significantly correlated with their annual audit fees; listed company's assets size, business complexity and balance rate are also significantly correlated with their annual audit fees.3. Comparative analysis, from the supply side or from the demand side, the accounting firm's industry specialization, audit market competition and the "International Four" cooperation are significantly affected the audit pricing. But on listed company's perspective, audit risk has a significant positive impact on audit fees, while on auditor's perspective no significant effect on audit price.The result suggests that:first, strengthening the concept of CPA risk, improve accounting firm compensation system. Second, make standards on audit fee disclosure content and format, and improve corporate initiative of information disclosure. Third, standardize the market competition of auditors and audit fees, control the impact of competition on audit pricing. Fourth, strengthen Certified Public Accountants'abilities and local firm's competitiveness.The innovations of this paper are mainly in:1.Different perspectives, selected the suppliers of audit services (accounting firm) to be our fundamental perspective.2. Compared of different perspective on audit pricing.3. Revealed some factors that affect audit pricing.