Is The Auditing Reputation Mechanism Of Accounting Firms Effective?

Reputation mechanism is an informal and non-obligatory institution.Audit reputation mechanism refers to different respects of industry of audit.It has the functions of transferring marketing information,providing guarantees of quality,saving trading costs as well as promising development of capital market.For accounting firms,if the audit reputation mechanism is effective and when audit-reputation-break happens,it will be punished by the public and suffered from economic loss.There are lots of papers proves that developed capitalism market is strongly effective,while there exist different research results related to the effectiveness of audit reputation mechanism for accounting firms.In August of 2013,CSRC(China Securities Regulatory Commission)will put more penalty on fake of financing and failure in audit with the help of Ministry of Finance.Based on above facts,this dissertation focuses on related cases of accounting firms,ranking 100 in China,being punished because of failure in annual reporting audit for listed companies in<Written decision of administrative penalty>announced by CSRC during 2010 and 2015.The research is based on the decrease of audit reputation due to audit-reputation-break and detect whether the number of customers and fees will decrease,the transferring of customers will increase and accounting firms are more tended to provide off-standard reports and other listed companies will give obvious negative reactions during events.Then we can make judges of whether the audit reputation mechanism is effective in annual reporting audit market in China and give suggestions according to related reasons.Moreover,from the time of the combination between CRSC and Ministry of Finance,we make the compare of before and after three years and get the results of whether the reinforce of supervise could promote the effectiveness of audit reputation mechanism,and then give the reasons as well as suggestions to solve the problem.During the process of specific research,this dissertation chooses cases of 7 accounting firm's audit failure between 2010 and 2015 as study object,before and after 3 years punished years as study period to analyze the issue.It turns out that after the audit-reputation-break happens,marketing percentage and audit fees are not obviously declined and there are no obvious reactions of other audited listed companies during events.It proved the penalty of CSRC and Ministry of Finance in 2013,as an event of audit-reputation-break,has no substantial effects on choices of accounting firms for the public and the functions of reputation mechanism is not fully behaved.Aimed at the above problems and combined with situation in our country,this dissertation gives suggestions of forming excellent audit marketing circumstances,perfecting corporative structures for listed companies,strengthening power of supervision,and penalty to promote the better circulation of reputation mechanism of accounting firms and audit market.It's known that maximum of enterprise value is always the goal for all shareholders and operators.Therefore,such issues as factors influencing enterprise value and how to enhance enterprise value to the utmost have always been regarded as key points by scholars.The thesis tries to make a research on influences of CFO's financial executive force on enterprise value from a perspective of enterprise's board of directors.That's to say,it reveals how CFO shows the impact on enterprise value through managing investment decision-making,especially inefficient investment.