| In the auditing market, Audit pricing have occupies a very important position, it is the product which contains the costs of the audit, audit quality and audit risk. However, Chinese audit market development is unperfect. Listed companies on the demand for high quality audit services is not voluntary, mostly forced by government regulatory requirements, resulting in the audit market,"Lowballing" or "buying audit opinion" phenomenon abound. In the audit pricing process, accounting firm usually pay more attention to the cases which can be looked and seen while accounting the resource costs like its investment in manpower, material resources, time and internal risk factors. However, the macro-environmental factors are rarely considered such as the legal environment, government regulatory environment, external face of litigation and arbitration. Guangxia, Enron and a series of audit failure events, have made making the major accounting firms involved in big wave of litigation in both domestic and international, civil liability to pay compensation or take amazing criminal penalties. With the improvement of Chinese legal environment and government regulation, especially in2007, the promulgation of" cases involving accounting firms in the audit business activities in a number of civil tort" by the Supreme Court which put greater emphasis on the auditor’s civil liability and litigation risk, the risk premium on audit pricing are more and more important. On January27,2010National Development and Reform Commission issued "accounting firm charges for Services". It reflected that the government began to emphasize on the pricing of accounting firms. Legal environment, government regulation and other factors which can influence the pricing of audit and the audit market also means a lot for a its healthy development without saying.From literature study, we found that many people used to study on the previous factor of its internal audit pricing while mostly ignored the influence of legal environment, government regulation and other macroeconomic factors.Therefore, this paper, drawing a large number of relevant theory and international evidence, based on empirical analysis by using the standard method of combining tests to2007-2009A-share listed companies and2679samples of empirical research, following" legal, regulatory environment-audit risk-audit pricing "logical thinking to study the legal environment, government regulation and other macroeconomic factors which affect the pricing of audit.The study found that Chinese certified public accountant in the audit pricing will think comprehensively about the factors which related to the legal environment, government regulation, listed companies are subject to litigation and arbitration etc. The CPA will take the potential risk of legal environment into account in a place where its legal environment is better so as to charge higher risk premiums. If the listed company by the government regulatory penalties, litigation and arbitration, the CPA pricing are higher and also government regulation of the audit pricing has a significant impact. Meanwhile, the paper also examines audit pricing of accounting firms, research it shows that "top ten" accounting firms charge higher audit fees than the "non-top ten" accounting firms, it is more remarkable in the areas with better Legal environment. Whether listed companies are non-standard unqualified audit opinion or it is in the economically developed regions or not are significantly associated with audit pricing. |
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