Research On The Relationship Between Audit Market Structure And Audit Quality

In the audit market, audit opinion is the link between the staff who provides auditservice and the user who obtains audit information. As a performance criterion in theauditing business, audit quality determines the development of CPA industry. Auditopinion is the final result that determines the quality of audit. What kind of audit marketstructure should be established and how to improve the audit quality are the purposes ofthis thesis.By combining qualitative research and quantitative research together，this thesis tryto find the relationship between audit market structure and audit quality. Based on thedata of listed companies and accounting firms from2006to2010, this thesis studies theeffect on the audit quality from the point of audit market concentration, industryexpertise of accounting firms, location of accounting firms as well as accounting firmsreplacement.This thesis is divided into five parts. The first part introduces research background,content, research methods and innovations of this thesis as well as summaries relatedliteratures on audit market structure and audit quality; The second part defines thedefinitions of audit market, audit market structure, audit quality and elaborates relatedliteratures on audit quality; The third part focuses on the theoretical analysis of auditmarket concentration, industry expertise of accounting firms, location of accountingfirms as well as accounting firms replacement; The last part is empirical research,fromwhich oligopolistic audit market is put forward.Also, some suggestions, such asimprove the degree of industry expertise,break geographical constraints and improvesupervision on accounting firms replacement are hoped to be taken.