The Impact Of Restructuring Of Special Ordinary Partnership On Audit Reputation

The CPA firms’ restructuring of special ordinary partnership is the urgent requirement of rapid development of economy and society, aiming at helping the domestic firms to be stronger and bigger. By studying the relationship of the restructuring and auditor reputation, it helps the CPA firms grasp the factors affecting auditor reputation, find the right direction to go, improve auditor quality and establish a good reputation.The paper starts from theoretical research. It summarizes lots of foreign and domestic literatures, and studies the restructuring effect on the auditor reputation based on property rights theory; human resource theory, incomplete contract theory and reputation theory.Next, the paper makes an empirical study to confirm the relationship between the restructuring and auditor reputation. First, it examines the relationship between restructuring and auditor reputation indirectly. Based on the data from 2008 to 2012 of 5 CPA firms which had first completed the restructuring, this paper studies the relationship of organizational form, client importance, audit efficiency and audit opinion. Among them, the audit opinion is an alternative variable of audit quality, and audit quality is a manifestation of auditor reputation. The study finds that after the restructuring, audit efficiency decreases, and the audit quality is enhanced. And the higher the importance of the customer is. the higher the efficiency of the audit firm is, and the more likely a non-standard audit opinion is to be issued. It’s more significant after the restructuring. That is. the restructuring will help firms improve audit quality and enhance auditor reputation.Then this paper studies the impact of the restructuring on the auditor reputation directly, based on the data from 2006 to 2012 published by CICPA. The rankings are the alternative variable of audit reputation. The paper examines changes in CPA firms’ income, the scale and punishment before and after the restructuring, and their influence on auditor reputation. The result shows that restructuring will help improve the auditor’s reputation, while enhancing the positive effect of income and scale and the negative effects of the punishment on auditor reputation.So it’s right to continue to promote the reform vigorously, in order to improve the overall professional level, enhance audit quality, and establish a good auditor reputation.