Impact Of The Accounting Firms Changed Form On Audit Quality

Since July,2010, The Ministry of Finance and relevant departments issue aseries of interim provisions, pointing out that large and medium accounting firmschange into limited liability partnership within specified time and small accountingfirms change into general partnership. So it not only provides audit firm becomingbigger and stronger with good conditions, but also lays a solid foundation forimproving audit quality. As with this transforming, I select companies which isaudited by ten changed accounting firms and twenty accounting firms which are notchanged, and then make an empirical experiment between audit quality and forms.At first, this paper reviewed the relative research achievements at home andaboard，which is mainly talk about audit quality and its factors and audit forms and itsfactors, learning that aboard research aiming on how to extend LLP, while homeresearch exists not many empirical experiments without consensus conclusion.Consequently, the research on changing form has theoretical and practicalsignificance on improving the audit quality. What’s more? This paper has defined theconcept of LLC, NP and LLP. Hence, make a clear line on the develop audit formsamong China England and America. Lastly this paper theoretically analyzes theaccounting firms changing forms on audit quality from the respective ofprinciple-agent theory, externality theory and enterprise theory, and then puts forwardthe relevant hypothesis.Before we make an empirical research to test the assumptions, we accumulatethe absolute value of maneuverability accruals by different year and different linewhich is the good proxy of audit quality according to the pre-research. Then weanalysis the theory of DID model. Based on it, we add several variables to create anew model which is more accurate to test in this paper. At last this thesis analyzes theimpact of accounting firm changing form on audit quality through descriptivestatistical analysis, correlation analysis and multivariate regression analysis, arriving at the following conclusion: changing form is helpful to improving the audit quality.And with the deepening change form, it becomes more obvious.Lastly, this paper progresses the explanation for the conclusion, and based onthe practical situation in china, puts forward policy suggestions for improving theaudit quality, such as extend the field and overdrive the transforming, strengthen theconstruction of LLP legislation, establish and improve the corresponding system ofLLP.