| With the continuous deepening of reform and opening up and the market economy continues to improve, our country has emerged in a number of strong, with large-scale enterprise group, which in the world already has a considerable competitive edge. However, in China's audit market, our local accounting firm has no sufficient capacity for these large companies to provide appropriate supporting services. Large domestic firms to audit clients is difficult to undertake, the face of the huge market demand, can only feel powerless and frustrated, had to hand over the "Big Four." However, the "big four" audit of the domestic large enterprises, especially financial enterprises, because of its special nature, often relates to our national security. Therefore, we have reason to be borne by the domestic large national economy and large domestic enterprises involved in the audit, the domestic large enterprises also need the appropriate size of the domestic firm to provide related services.Chinese Institute of CPAs (hereinafter referred to as "AICPA") in May 29, 2006 held in Beijing in the third CPA forum for discussion of the domestic local firms, "bigger and stronger, "the ways and the future development ideas, And in September 28,2006 issued a "bigger and stronger on the promotion of the views of Certified Public Accountants (draft) " to promote the accounting firm how to "bigger and stronger"to do a comprehensive guidance and planning, And proposed to promote the firm "bigger and stronger, "the overall strategic objectives. In this context, local accounting firms in China ushered in a new round of large-scale surge of development. Joint and other means through the merger, some firms are quickly expanding, a strong impetus to China's accounting firm's "bigger and stronger"strategy, but also for China's audit market, the construction of the field of national brands to lay the cornerstone.By the scale of development in recent years, a number of local firms to measure the size of the target in a short time has gone beyond the "four. " Economies of scale from the testing firm, our country has a certain amount of local firms has reached economies of scale, that of "bigger and stronger"strategy yielded good results, but the next step, we bound the scale of this Audit quality under high and low for great concern. We need to promote the firm in a rapidly developing process of large-scale study in depth the following issues:the experience of the audit market at this stage whether the data support the scale with the audit firm has a positive correlation between the quality? "Big Four" and our local office whether there are differences between audit quality? Impact on the market of audit firms in different scale factors which audit quality?Modern audit theory, large firms can ensure high quality audit services, the firm's size as a signal mechanism and the guarantee mechanism, the firm can bring the scale of the development of the corresponding economic effects. In order to be in the fierce competition in the market to survive and more room for development, in reality, indeed, many firms through merger, consolidation, etc. to achieve the rapid expansion of the scale. The local firms in China in recent years by the scale of development, we need economies of scale in local firms the situation again, research firms in different scale differences between the situation of audit quality. That is why this study we tried to verify the scale of the current development of accounting firms in China still exists in the scale of economic phenomena, to answer whether the firm size and audit quality has a positive correlation between the level of firms of different sizes between the quality of auditing Are there significant differences in such issues; and attempts through the accounting firm size and audit quality of the correlation between theoretical analysis and empirical testing, to find out the scale of the development of accounting firms improve audit quality factors, and draw the relevant Policy recommendations.The first chapter is an introduction. In this chapter, mainly on the research background, proposed in this paper to study the problem, and then pointed out the purpose of this study and significance, and introduces the research contents, methods and the overall framework, and finally pointed out the article The main contribution and shortcomings.The second chapter is literature review. This chapter specifically reviews the previous literature on the accounting firm size, audit quality definition and measurement standards, and the measure of audit quality were compared. We believe that indicators to measure the size of firms should integrate their study, the economic effect of this test in the firm and firm size and audit quality inspection in the number of CPA firms have chosen to divide the size of the firm level; for Services The audit quality, we choose the degree of earnings management to be replaced, and the adoption of basic Jones model was measured. In addition, the chapter also reviews the international accounting firm on the correlation between size and audit quality research in theoretical and empirical literature, and previous research a literature review.The third chapter is the theoretical basis. This chapter first introduces the theoretical basis of this analysis, the theory is based on the specific scale of economic theory, the principal-agent theory and signaling theory. Among them, the principal-agent theory is the study of accounting, audit issues based on theory, we mainly discussed in the article in the audit market, the agency relationship and agency relations for the agency cost problem. On the relationship between firm size and audit quality analysis is based on the scale of our economic theory and signal transmission. Economies of scale through theoretical analysis, we believe that large firms because the human resource management, experience, industry expertise, research advantages, access to qualified, pre-paid costs and the ability to undertake the business and risk areas such as advantages, therefore, In theory, large firms audit quality will be higher than small-scale firms; the same time, the firm's size can be used to explain the role of audit quality signal, large firms tend to provide high quality audit services.The fourth chapter is the size of accounting firms on audit quality inspection. This chapter is divided into the following two aspects:l,we draw on previous research methods to the number of CPA firms by accounting firms as indicators of the scale level, using the "survival of competition " on the existence of accounting firms to test economies of scale;2,the accounting firm size and audit quality and relevance of empirical test, research home and abroad, through a comparative analysis of audit quality using quantitative methods to the extent of earnings management as an alternative measure of audit quality variables, and select the appropriate The control variables, and establish accounting firm to audit quality scale model, then the variables are descriptive statistics, correlation tests and multiple regression, the final results of the empirical analysis. This section verifies whether the size of accounting firms as theoretical analysis and audit quality, as there is a positive correlation of the "big four" local firms in China and our local small and medium firms with the largest between the quality audit Differences in audit quality and impact of various variables were analyzed.The fourth chapter is the size of accounting firms on audit quality inspection. First, we draw on previous research methods to the number of CPA firms by accounting firms as indicators of the scale level, using the "survival of competition " on the existence of accounting firms to test economies of scale; Secondly, the accounting firm Correlation between size and audit quality empirical test, research home and abroad, through a comparative analysis of audit quality using quantitative methods to the extent of earnings management as an alternative measure of audit quality variables, and select the appropriate control variables, and establish CPA-scale model of the impact of audit quality, then the variables are descriptive statistics, correlation tests and multiple regression, the final results of the empirical analysis. This section verifies whether the size of accounting firms as theoretical analysis and audit quality, as there is a positive correlation of the "big four" local firms in China and our local small and medium firms with the largest between the quality audit Differences in audit quality and impact of various variables were analyzed.The fifth chapter is conclusion and future outlook. This chapter draws the following conclusions:1,2007-2009 years, the "big four" of the market share dropped from 54.78% to 44.30%, a decrease of 10.48 percentage points, and there is gradually decreasing trend; while the other three types of firm's market share increased 8.44%, respectively,5.16% and 1.44%, showing a clear upward trend, indicating that the scale of China's local firms as a whole has reached a scale and effective, there are economies of scale. We believe that between these different types of firms, more significant differences in characteristics, so the criteria for the classification is more reasonable;2, the assets of the larger company, its general level of earnings management is" relatively low; the company's total accruals, the more inclined to earnings management; with high cash flow the company, its relatively low level of earnings management; income The higher the company, the extent of earnings management is relatively low; companies with high financial leverage are more likely to fall into financial difficulties, and therefore more likely to earnings management; year loss-making companies more likely to borrow against future financial earnings management Status of amendments. At the same time, we found that the "big four"audit quality is better than with the domestic local firms, local "Eighf"audit quality is better than the local small and medium scale firms.Through this study, we found that after several years of development, the existence of local accounting firms have economies of scale, the conclusion is different from previous studies. We examined the economies of scale based firm will set the size class dummy variables, as explanatory variables; study found that between firm size and audit quality there are significant positive correlation, the international "big four " Audit quality is better than domestic firms, of which the gap between small and medium firms is particularly significant; native "eight" in the audit quality is better than the local small and medium sized firms. These findings not only demonstrate that we promote the firm in recent years large-scale effects caused by the development, but also for our future continue to promote the development of firm size provides a theoretical support.However, this study has some shortcomings, including:the use of "survival of competition law, " the existence of firm inspect the economies of scale, the size classification of firms certified public accountants chosen although the reference to the amount of the related Research literature, but still has a large subjective, in the future may consider using other methods of firms to cluster in different scale to test, so as to assist the verification of the results; for the measure of audit quality, we use earnings management As the extent of audit quality evaluation standard, which although relevant theoretical support, but also more single perspective; article by Jone model as a direct audit quality measurement methods, not based on the model of China's national conditions and make further improvements in future Study, may also consider other alternative indexes. |
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