The Research Relations Of Accounting Firm Merger And Audit Quality

China’s accounting firm has been engaged in ongoing merger and reorganization since 1980,when the CPA systems have been restored for thirty years. During the periods, it occurs four times large-scale waves of consolidation. They are driven by the government,or they are to enter the certain threshold in the two passive mergers,which is not entirely market behavior. Therefore the combined results are dissatisfied.But with entering the WTO in 2002 for China,the international trend is more and more obvious, as well as a large number of international companies and capital are fallowed to enter China’s market. This phenomenon directly led to market competition fierce increasingly, especially international "big four" accounting firms stand out in the domestic market from beginning to end.In order to confront the "big four",the AICPA officially promulgated the "China Association of Certified Public Accountants on accounting firms to promote bigger and stronger opinions" in January,2007.This is to encourage firms to be bigger and stronger through mergers.Therefore, accounting firms have to take into the third merger wave. Although the merger scale is massive, our firms only achieve a little "bigger" in some certain degree, not "stronger".In order to change the actuality, CICPA continue publish the files about further develop and expand in June,2012, which speed up the merger and broke out the fourth. Therefore the purpose of this paper is to analysis whether accounting firms will be "bigger and stronger" in the fourth merger wave.And we can summary conclusion to provide more experience for the firms’ future development.Based on the theory of scale, "deep pockets" and reputation,this dissertation takes the angle of fourth merger wave and uses the combination of Ruihua accounting firm as an example. This dissertation selects all the A share public companies audited by Ruihua accounting firmin 2010-2014 before the merger as samples. Observing three indicators’ changes,including the proportion of non-standard audit opinion ", " earnings management " and" audit delay”,we can judge whether or not in the fourth combined firms become more "bigger and stronger".According to the research analysis,the following conclusions are drawn:Through the case analysis concluded that things are combined, improve audit quality, but the increase is not significant. Through the investigation for Ruihua accounting firm,the reasons for this conclusion may be that firms lack integration experience, leading to that both sides do not take out effective integration for talent, management, and managementconcept and so on.On the other hand because they ignore the supervision of audit quality. This article puts forward the countermeasures:(1) Accounting firms should do prepared work better before merger, complete the integration better ain r the merger and do supervision better after merger;(2) The government should provide more excellent talents to take charge of firms;(3) Industry association should strengthen the registration of practicing personnel management, and strengthen monitoring.This article’s Innovation: We select typical merger case from the fourth wave of consolidation as the object of study, in order to verify the impact of the merger audit quality. Because of small sample,it is suitable for building measurement system of audit quality.