How Audit Fees About The Company’s Risk Sensitivity Changes Before And After The Financial Crisis

This thesis is based on the 2008 financial crisis and the model proposed by Simunic to verify how Audit fees about the company’s risk sensitivity changes before and after the financial crisis.With the financial crisis, many global companies have suffered heavy losses, naturally, the risk of company have changed according to this external event. The thesis through the happening of the financial crisis to study the impact of company risk on the audit fees, It is in better control of endorgenous. With the use of the Chow test, the thesis confirmed that in the cut-off point (the financial crisis) audit pricing model changed, various factors who affect audit fees,like the accounting firm size, firm size, accounts receivable, asset-liability ratio and so on, have changed after the crisis. The further empirical analysis found a positive correlation between audit fees and corporate risk, during the financial crisis, with the increase of the company’s business risk, audit procedures and scope expanded, the CPA pay more attention to the litigation risk, all this lead to improving its audit fees. This paper will analyze audit fees each before and after the financial crisis. Before the financial crisis, the audit fees of the sensitivity of the company’s risk are low, after the financial crisis, the audit fees of the sensitivity of the company’s risk have improved.Additionally, the thesis also found the "big four" accounting firms audit fees relative to non-"Big Four" accounting firms exist audit fee premium, but after the crisis, the audit fee premium has decreased.Finally, based on the empirical analysis results and further analysis of its causes, the thesis proposes appropriate policies and recommendations.