Accounting Firm Restructuring Economic Consequence

Our Accounting firm experienced in 1999 after the Reorganization, as of July 1, 2010 only 36% of the ordinary partnership, limited liability most of the rest are used,。It is this form of organization, making some firm poor quality, seriously affecting the quality of the audit. To make me bigger and stronger domestic-owned accounting firm as soon as possible, in July 2010, the ministry of finance of the People’s Republic of China and The state administration for industry and commerce of the People’s Republic of China issued "on the promotion of large and medium-sized accounting firms using a special form of general partnership organized provisional provisions "(Cai Kuai [2012] No. 12)(hereinafter referred to as the " Interim provisions "), calling for " a large accounting firm and before December 31, 2010 for the restructuring of the organization in the form of special general partnership, while encouraging medium-sized accounting firms in 2011 December 31 restructuring as a special form of general partnership organized. " April the following year the Ministry of Finance has issued a "large and medium-sized accounting firms for the restructuring of the organization in the form of special general partner of the Regulations" and other regulations, notify our accounting firm to support the restructuring.After introducing the relevant background, first of all, recalling respectively and sort out the literature including legal liability accounting firms, economic consequences of the special general partner of literature and customer choice of accounting firms on domestic and foreign. Secondly, on the basis of the aforementioned documents accumulation and analysis of the proposed three hypotheses of this article,Examine the influence of accounting firms after the restructuring of the limited liability special general partnership due to the increased risk of litigation, audit risk and other risks to audit quality, audit fees, accounting firms and other economic consequences of change.Finally, through empirical verification above assumptions, the risk of substitution variables and stability test was carried out after the replacement, the results are consistent with the empirical results. Make appropriate recommendations based on empirical results.This paper uses a combination of normative and empirical way to Study after restructuring based accounting firm risk control perspective economic consequences,formed form 2009 to 2014 the first restructuring completed 9 big accounting firms audit the a-share listed companies as samples.The following conclusions: combined with many theories, the paper summed up the three accounting firm risk control path. Based on " the audit requirements of insurance theory," accounting firm restructuring, in order to compensate for this form of organization change information risk posed by increased, accounting firms is likely to increase the risk of audit fees make up to achieve the purpose; at the same time, in order to effectively avoid this risk, another path, that is to improve the accounting firm audit quality; according to post "risk-reward theory", the accounting firm restructuring, the implementation of the CPA audit in the implementation of the same business, and CPA executive business partner risk faced have increased, new firms to compensate for the increased audit risk will increase audit fees; based on the "theory according to quality" in the limited liability accounting firms by the restructuring of the general partnership Thereafter, the increased risk of litigation, based on consideration of risk aversion, one of which the accounting firm that is the path to improve audit quality. According to the theory according to quality, quality improvement should lead to price increases, namely to improve audit quality brings improve audit fees. That brings improve improve audit quality audit fees; later based on the "customer relationship management theory", the accounting firm restructuring, organizational forms of change brought about by a change in the legal responsibility of an accounting firm to perform the audit of the CPA in response to this increased risk, the accounting firm risk control is a path more carefully screened to undertake customers.The main innovation of this paper:Firstly, the first time after the accounting firm restructuring, increase the risk of economic consequences of the entry point to study accounting firms after the restructuring. The risks include the audited entity’s business risks, the accounting firm of auditors to perform the audit risk, the audit litigation risk and so on. Modern audit has been developed to a risk-oriented audit and maturing, showing the importance of risk in the audit division in the implementation of the audit work.Most Economic Consequences of previous studies by the accounting firm limited liability for the restructuring of the special general partnership form of organization to legal liability or firm as the entry point, I believe that it is not accurate enough, not to dig the key factors. Suppose the same time this article was added risk factors and the interaction term alternative accounting firm product to better validation of this article.Secondly, the impact of most of the scholars at research firm restructuring accountant firms are confined to audit quality or audit fees. After standing still no accounting firm restructuring its risk control perspective were analyzed. Through research, not only will the quality of the audit, the audit fees include in, but also dig out a risk control channel- before and after the restructuring of the accounting firm’s client management.