| In today’s world, the western audit industry has grown by the original "eight" to today’s "big four"; while China’s audit industry started late, the market mechanism is imperfect which is still in a state of intense competition. In early2007, CICPA come up with "bigger and stronger""opinion to local accounting firm, and proposed the key support the internationalization of firms of ten or so. At the same time, in recent years, the policies and regulations of audit fee is launched, which exposed the real phenomenon of charge don’t exist in the specification, this is badly in need of governance.Therefore, in the background of China’s transition economy. What is the audit market structure? Whether effective? What kind of Local accounting firm development? Is audit market behavior reasonable? Have any impact audit market structure on audit pricing? This is one of the important problems to attention and careful study.Through this article’s research, this thesis will enrich and develop academic literature of the audit pricing, provide theoretical support to an empirical study of audit market structure and audit pricing, and provide guiding role for the healthy development of audit market and practice.Research ideas of this article is:use the theory of SCP framework for reference, based on the audit market structure in China, We test empirically the audit market structure impact on audit market behavior; Through a competitive market theory, we analysis the current market structure in our country and draw relevant theory, summarizes the policy recommendations to speed up the development of China’s audit market.In this paper, the research content is divided into six chapters; the following is the main content of each chapter:Chapter1, Introduction. In this chapter, first of all, put forward the background and significance of this research. And then elaborated briefly the research ideas and the method of this article.Chapter2, Institutional background and literature review. In the first part of the system we summarized our system and policy about optimize audit market structure and regulate the audit fees in china. Three aspects of research status is introduced, including audit market structure, the audit pricing, audit market and audit pricing structure, summarizes the research achievements at home and abroad, and carries on the summary and reviewChapter3, Theoretical analysis and the research hypothesis. This chapter in the first part from three aspects in the research of this article made a theoretical analysis. First, this paper briefly introduces the audit pricing and its way; Secondly. This paper introduces the theory of industrial organization; finally, elaborated in this paper, by using the theory of industrial organization analysis framework. The second part, embarks from the theory of industrial organization, on Chinese audit market structure and audit pricing is analyzed in theory, and is proposed in this paper, the research hypothesis, which laid a foundation for later research design.Chapter4, Analysis Chinese audit market structure. The measure of the method of the current audit market structure is detailed described, and the analysis a-share condition of audit market structure in our country statistical.Chapter5, Research design, the empirical results and analysis. Through empirical research, We analyze the structure of the audit market in China, and to determine the relationship between the structure of the audit market and audit pricing, so that the audit market structure influence audit pricingChapter6, the last chapter of this article, the research conclusion, the main innovation, policy implications and future prospects.From statistical analysis of data and empirical testing of this research the following conclusions:Firstly, Current situation of our country’s market structure of the audit. From the perspective of the statistical results of CRn, changes of CR8and CR10reveal that Concentration have increased significantly and is on the rise. From HHI’s statistics, our country’s audit market is still in the state of competition, but competition among Certified Public Accountants is more balanced. From the statistical results of industry expertise, the domestic firm’s market share has a certain improvement, but not very obvious, accounting firms with industry expertise within the "top ten", basically in the construction industry, such as individual existence obvious of certified public accountants industry expertise. To scale to measure China’s a shares of the audited audit market barriers to entry is not high, the small differences between years.Secondly, the market share of local accounting firm is improved. From the perspective of the statistical results of CRn, the market share of "big six" firm is promoted gradually. The "big four" international market share is declining. And both a change in the market share of a turning point came in2008, powerfully proved the implementation of the policy measures such as "bigger and stronger" effect.Thirdly, the three constituent elements of audit market structure have significant positive correlation to auditing price. The empirical results as follows:a. the audit market concentration is higher, audit pricing is higher; b. More accounting firms with industry expertise, the more we have the right to speak, and thus produce reputation premium, the higher the audit pricing; c. Audit fee will be increased as the barriers to entry and increase.Above reveals the present situation of audit market structure and its impact on audit pricing, proves that the theory of industrial organization based on the analysis of audit market applicability to such services.Innovation and contribution of this study is mainly manifested in the following three aspects:a. Makes up for the use of large sample, multi-angle approach is insufficient in the study of audit market structure in our countryThis article selects the relevant data of listed companies in our country in2000to2011years, from various angles respectively, using the method of CRn, HHI, and market share of auditing market measured c industry expertise and concentration of the audit market.b. To strengthen the local accounting firm "bigger and stronger" provides new evidenceThis study shows that after carefully analyses the domestic a-share market in2002-2011"international big four" and "six big domestic" after the change of market share, we found that the "big four" international and the "big six" domestic market share trend appeared obvious turning point in2008."Big four" international fell from42.06%in2007to29.64%in2008, followed by a slow downward trend; The "big six" domestic jumped from15.30%in2007to27.13%in2008, then show clear rising trend. The evidence that the Chinese institute of certified public accountants issued in2007to promote the opinions of the public accounting firm to do bigger and stronger, and a series of policy and domestic accounting firm merger initiatives related to produce a good, positive effect,c. From the Angle of competitive market theory, put forward the new idea on the development of China’s audit marketAlthough concentration of audit market in china is not high, there is a heated competition, but more and more concentrated trend of the market is irreversible. In the near future, Whether China’s audit industry will face the contradiction between monopoly and competition such as "Marshall Conflict"? The answer is no, a competitive equilibrium in monopoly, certified public accountants will work with potential competitors in the market to achieve economies of scale effect and free competition, ultimately realize the maximization of social welfare. Therefore, the government should continue to strengthen policy such as "bigger and stronger", equal treatment to each firm; to reduce the firm’s entry and exit barriers.Insufficient research of this paper:one is the theory of industrial organization SCP analysis approach is structure-behavior-performance, not limited to this article, under the SCP analysis framework, we only study the relationship between structure, behavior, theory is incomplete. Second is about the empirical test of competitive market theory which is imperfect, yet to be further research. Three in terms of the measure of audit market structure, especially index selection the about industry expertise and entry barriers is not comprehensive, Not detailed description of audit market structure in our country. |
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