Research On Actuality And Countermeasure Of Audit Market Structure Of China

CPA audit has been an significant part of capital market since 1820s. And it can enhance the reliability of financial reports, reduce information risk of both trade sides, and improve efficiency of resource allocation. According to industry organization theory, audit service, as final fruit of accountants office competition action, must be influenced by audit market structure.The CPA industry has been playing an important role in China's economics after 30 years'development. However, this cannot prove that the audit market is nearly perfect. As an organic part of market economy system, the structure of audit market not only influences the whole market system optimizing resource scheme, but also decides the practical position and development place of the CPA industry. In recent years, more and more certified accountants'offices have participated in mergers. As to foreign audit market, the market concentration ratio of our country remains very low. And the most significant difference between our audit market and western well-rounded audit market is about the market concentration ratio. Competition in the audit market is too keen to interfere with the quality of audit service. So research on audit market structure is of significance and far-reaching historical significance when comes to inquiring into such questions as how to supervise audit market, how to build sound competition atmosphere, how to improve the quality of the audit service and the development of national economy.As to attention on audit market structure, abroad research started much earlier, which was result of the early development of audit market, which paid close attention to position of audit market structure, the market concentration ratio and stability of market share of accountants office. Those researches are product of analysis of industrial system theory in view of specific audit markets. In our country, because the audit market started late, research on audit market structure has small quantities and much part of that use the experience of other countries for reference. And most research just analyzed our country's audit market structure, and many of them were positive analysis, just according to cross-sectional data of some a particular year. And researchers adopted different index, which resulted in difficulty in making an effective observation of the general drift of audit market structure.This article analyses some influencing factors and constituent parts of audit market structure from the standpoint of theory of industrial organization. It has depth analysis on present situation of our country's audit market structure and descriptive statistics from two points:the market concentration ratio and barrier to entry. And it analyses reasons for present situation through four influencing factors of audit market structure. It intends to throw out some suggestions on how to perfect audit market structure. This article firstly enters into the factors that influence the audit market structure. This article analyses how audit industrial policy, external system factor, industry management of audit market and offices affect audit market structure, on the basic of such a logic train of thought:the service supply side and demand side can influence market structure, and those four factors which has been mentioned before would influence the demand and supply of high quality audit service, with a train of thought from macroscopic view to microcosmic view, from entirety to part. And the major route to improve audit service quality is improving industrial concentration and clearing up man-made barrier to entry different regional markets. When checking and ratifying analytical framework, it analyses current situation of Chinese audit market from two point of view:concentration ratio and barrier to entry, and offers proposals to perfect audit market in order to promote audit market development and satisfy capital market's requirements. Changing discriminatory industrial policy, encouraging office mergence and enhancing barrier to entry are from the perspective of perfecting external system environment. And making office big and strong and diversifying competition behavior also needs policy's guide. After all is said and done, perfecting audit market structure relies on governmental actions to some extent.