A Case Study Of Economic Outcomes Of Shine Wing Accounting Firm Mergers

Since accounting firms decoupling reformation,Ministry of Finance of the People's Republic of China and the Chinese Institute of Certified Public Accountants have issue many kind of policies to encourage domestic accounting firm to expand by merging,bigger and stronger have become an important target in auditing industry of our country.Domestic accounting firms have experienced three times merger wave driven by government and market,which include the "decoupling restructuring" merger tide from1998 to 1999,the "qualification-oriented" merger tide from 2000 to 2001,and the "crisis-oriented" merger tide from 2006 to now.However,concerning on domestic auditing industry that have experienced the ten years merger wave,we can't get a consistent conclusion for whether frequent merger have positive economic benefits.The existing researches mainly focus on the case study of a single merger,while the attention of the merging history of an accounting firm is not enough.And the indexes that have been used in research to evaluate the economic outcomes contain revenue,audit fee,quality of audit,the number of customers,customer structure and so on.The academics have always preferred to study from some dimension to evaluate the outcomes of mergers.Based on this,this paper adopts case study method,combining with the A-share listed company financial data and auditing industry comprehensive information,using descriptive statistics as the main research tool.In order to evaluate economic consequences of the four times mergers experienced by ShineWing accounting firm from the perspective of accounting firm,customer and market,We adopted revenue(total revenue,average income of CPA and market share),customer structure(quantities,scales and liquidity),audit quality(frequency of non-standard audit opinions and financial restatement,accrued profits)and audit fee as researching indexes.Firstly in the introduction part,this paper introduces the research background and reveals the research significance.By reviewing existing literatures,this part reviews and evaluates motivations and economic consequences forcing accounting firm merger.On this basis,this part introduces the research contents,research methods and framework of this article.Secondly from perspective of theory,this paper analyzes motivations,methods and resource integrating conditions of accounting firms merger.Thirdly,this paper introduces the background and process of the four merger cases,and analyzes the revenue and customer structure of the four merger cases.Fourthly,this paper analyzesthe audit quality and fee of the four merger cases.Lastly,from perspectives of board and accounting firms,this paper makes some suggestion for object selection and resource integration of accounting firms merger by summarized the conclusion of case study.After detailed case study of the four times mergers of ShineWing,this paper has drawn the conclusions as below.At first,on the whole,ShineWing has achieved positive merging effects by the four times mergers.Increased revenue and improved customers structure of the accounting firm show that mergers have improved attraction of ShineWing to customers and increased market share.Second,there are some negative effects after the four times mergers,for example decreased audit quality and reduced audit fee,in which show that resource integration and internal quality control system are important elements restricting merger effects and mergers may restrict premium ability of accounting firm reputation.Third,different merged object may lead to different consequences.ShineWing partly damages the sense of trust of customers and audit quality when it merges Ho and Ho accounting firm.Merged accounting firms locate in different areas or experience different merged process,in which may lead to different consequences.From the outcome,we can find that accounting firms need to clear their own target before the merge and analyze advantages and disadvantages of potential merger targets.In order to achieve their own expectation,accounting firms need to select merged objections.Otherwise it may be counterproductive,and constrain the developing process of the firm.This paper's main contributions are: different from the case study of a single merger,this paper has carried on the case analysis to the four important mergers that ShineWing accounting firm experienced.And an indexes system has been built to study on the difference of impact of mergers from accounting firms,customers and the market.So the outcomes of mergers of accounting firms can be showed more comprehensively.By analyzing the changes of indexes of ShineWing,the paper not only can explain the deep effect of mergers on accounting firm's risk control measures and quality control system,but also explain whether the customers would recognize quality of audit service improved by mergers.Then the paper can propose targeted suggestions to the picking of objection and combination after mergers.