The Research Of Accounting Firm Scale, Organization Change And Audit Quality

With our country joining WTO, Chinese Public Accounting firms begin to reach the world. In 2010, China’s Ministry of Finance issued the documents which required the big accounting firms to be transferred to Special Ordinary Partnership before the end of 2010 and required the middle accounting firms to do that before the end of 2011. The mainstream evolution pattern of the accounting firms’ organization form, taken the world over, is from the partnership to the limited liability and then to the special ordinary partnership in the 1990s. The development of auditing market in China is later than that in western developed countries and until the end of 2011 the special ordinary partnership was applied to big and medium accounting firms in China. Past domestic researches paid more attention to the relationship between scale and audit quality and to judge which organization form was better. And those researches stayed in the phase of theoretical studying. The research is based on the theory of expansion and the organization form after expansion. In the meanwhile, by learning the foreign experience we analyze the feasibility of the special ordinary partnership theory. It focuses on audit quality of the accounting firms whose organization form has transferred for Special Ordinary Partnership. Instead of audit quality through audit attitude and manipulation of accruals, this thesis uses empirical data to demonstrate the effect of organizational change on audit quality and manipulation of accruals. The conclusion is that both effects are negative.