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

To achieve our goal of making our accounting firms bigger and stronger, the Ministry of Finance and the General Administration of Industry and Commerce issued the "Interim Provisions on Promoting medium-sized accounting firms preclude the use of special general partnership form of organization" in 2010, a large number of accounting firms accelerated the restructuring process. However, whether the restructuring of the accounting firm can improve audit quality fundamentally, is still an academic issue which is worth discussing. So we selected the relevant data of the clients which have been audited by 10 accounting firms restructured in 2011 and 2012. We use empirical methods to explore the restructuring influence of audit quality.Purpose of this paper is to study the audit quality of the accounting firms whether can be improved after the restructuring. We hope that results of this study can make policy recommendations for improvement and development of special general partnership system, and be able to accelerate the improvement of the process of China’s audit market.In this paper, we use normative analysis and empirical method, principal-agent theory and risk-benefit theory to put forward our put hypotheses, then followed by empirical research on the basis of classical Simunic model. So we selected the relevant data of the clients which have been audited by 10 accounting firms restructured in 2011 and 2012.We check the change of the audit quality of the accounting firms after the restructuring policy.In this paper, our final conclusions are: the first, the audit quality of the accounting firms restructured in 2011 and 2012 has improved after the impletion of the policy. The second, the audit quality of restructuring year has not improved significantly compared with the year before restructuring, and the audit quality after restructuring year has significantly improved compared with the year before restructuring.