The Comparative Study Of Audit Quality Of Accounting Firms Before And After The Conversion

The audit quality of accounting firms has always been the focus of theory and practice.In July2010, the MOF and SAIC jointly issued《the Interim Provisions about promoting largeand medium-sized accounting firms to take the form of special general partnership》, whichfurther restated the importance of studying on the relationships between the organizationalform of accounting firms and their audit quality. The role audit plays depends largely on auditquality, and audit quality, thereafter, is greatly influenced by the organizational form ofaccounting firms.Based on the review and evaluation of existed research results from home and abroad,this paper will firstly use the theory of enterprise contract, risk management, auditing demandand regulation economics to discuss how to determine the relationships between theorganizational form of accounting firms and their audit quality, then select8local accountingfirms with H share qualification which have completed the conversion of special generalpartnership from2011to2012as the research subjects, using the data of their audit clientsfrom2009to2013as research samples for regression analysis, and further check out whetherthe organizational form of accounting firms has real influence on audit quality and identifythe degree of the influence, finally, according to the results of theoretical analyses andempirical tests，provide effective ways to improve the organizational form of accounting firmsand audit quality. Researches show that the organizational form of accounting firm does havean impact on audit quality, audit quality of accounting firms which have completed theconversion of special general partnership is significantly higher than the ones which have not,and the quality of firms after the conversion is also significantly higher than the ones beforethe conversion. Moreover, firms which have completed the conversion tend to issuenon-standard audit opinions, and firms after the conversion charge more than before. On thebasis of the analyses above, this paper puts forward some advice on the following aspects,strengthen the legislation construction of special general partnership, improve a complete setof standards on special general partnership, expand the scope of special general partnership,focus on the internal management of accounting firms.Compared with the standpoint of existing researches, this paper will study audit qualityin terms of its organizational form, and apply different theories to explain the relationships oforganizational form or its change with audit quality, such as enterprise contract theory, riskmanagement theory, the auditing demand theory, and the theory of regulation economics, these are also the innovations of this paper, which have not been found in existing researches.