The Impact Analysis Of Accounting Firms Merger On Audit Market Structure

With the globalization of capital market, foreign accounting firms stationing in mainland, a series of encouraging policies being issued by government, a new wave of accounting firms merging set off among local accounting firms, which began in the end of2007, has lasted more than three years. The wave is large-scale, involving various merger forms and accompanied by government policies, such as guided and expected to be "going out","bigger and stronger". Merger would lead to reconfigure of audit resource in market and changes of firm’s competitive position and audit product quality, further influence audit market structure. Therefore, considering the different features and background with previous merger wave, research that impact analysis of accounting firms merger on audit market structure is greatly timeliness and practical.This paper firstly summarized merger background, merger effect and merger risk of the new accounting firms merging wave. Secondly, based on industrial organization theory, enterprise merger theory, the paper analyzed effect of merger to market concentration, auditor industry specialization, economies of scale, enter and withdrawal barriers and product difference. In the theoretical analyses foundations, the paper counted30cases happened within domestic accounting firms among years of2007-2009as samples, with help from2006-2009A-share audit market data, mainly using descriptive statistical analysis and parameter test methods, and found that this merger wave generally improved audit market structure by comparing market concentration, auditor industry specialization, economy of scale, enter and withdrawal barriers and product difference that were prior and subsequent to merger. Finally, according to the impact analyzes above, this paper proposed several advices from the angle of merger, for example, how to select merger timing and merge objects, as well as merger integration.