The Conversion Of The Organization Form Of Accounting Firm And Its Influence On Audit Quality

In order to strengthen the CPA firm in China, the Ministry of Finance, the General Administration of Industry and Commerce jointly issued the regulation,named<Interim Provisions on the promoting the special general partnership to large and medium-sized>[Accounting [2010]12].The AICPA and local governments are actively promoting the conversion of the organization form of accounting firms. However, specialist don’t know whether the action boosted the audit quality when audit firm becomes special general partnership from limited partnership. Can this action effectively improve the audit quality? This is worthy of academic discussion and research questions. The answer offers theoretical and practical foundation for audit industry and CPA behavior after completing the conversion of accounting firms.The thesis focus on the changement of organizational form of the accounting firm in China. As a fact that the accounting firm is currently transferring from limited partnership to the special general partnership firm, the research question is how would the audit quality be effected by the conversion of the organization form of accounting firm from the perspective of legal responsibility, the reputation of auditor, and the independence of the auditor? Author selects the data of A-share listed companies audited by12accounting firms from2008to2011. The empirical study analyze the relationship between firm organizational form and audit opinion.The conclusion conducted by testing the911data samples from the year2011confirms the hypothesis that the auditor quality can enhance after the conversion of the firm organizational form. Further, by examining the2008-2011, the audit quality of four accounting firms after conversion can enhance, compared with eight accounting firms whose organizational form do not convert. Following the conversion of the organization form, the legal responsibility, the reputation and the independence of the auditor can enhance, producing the positive energy for audit quality. So the related department should continue to expedite the implementation the conversion of the organization form of large and medium-sized accounting firm to special general partnership.