Analysis On The Effect Of Accounting Firm Consolidation By HengXin Ruihua And YueHua Accounting Firm

In order to meet the needs of the development of socialist market economy in China and to further promote the CPA industry as well as to achieve international development goals,the Ministry of Finance,the Chinese Institute of Certified Public Accountants and other relevant departments issued a series of guidelines to enhance the development and growth of local accounting firms in 2007 which marks the beginning of the third merging wave of local accounting firms.From the perspective of current research,the indicators used to measure the economic consequences of the amalgamation of local accounting firms basically include: audit quality,audit fees,firm scale,customer structure and so on.These indicators of economic consequences are mostly used in a single article.However,few documents use several indicators at the same time illustrate the consolidated results of the merge of the accounting firms.In terms of the empirical study of the economic consequences,most articles use a large sample to study the amalgamation impact on audit quality and audit fees,which make them relatively shallow and simple.Due to the macrocosm of large sample study,problems caused by amalgamation is in lack of responsible solutions.Therefore,this study is of great practical significance to a certain extent.This article adopts theoretical reasoning and case analysis as research methodologies.By combining the financial data of the A-share listed companies,the audit data and the CPA industry comprehensive ranking information,exploiting descriptive statistics and comparative analysis as the main research methods,this article selects the firm scale(income,CPA number,market share),the audit quality(the concentration of certified public accountants,the frequency of issued non-standard audit opinion),the customer structure(customer quantity,customer size,customer liquidity)and the audit fees(average audit fees,audit cost distribution)as four indicators to analyze the effects of the consolidation of HengXin ruihua and YueHua Accounting Firms.In this article,the first chapter is the introduction,which introduces the background,the significance of selecting this topic,the literature review,research methodology and the basic framework of the paper.The second chapter is a brief summary of the accounting firm merge theory,which introduces the concept and mode of the merge,the influential elements,the theoretical basis and the measurement of the merger effects.The third chapter is the analysis of the case,including the background analysis of the ‘RSM CHINA Certified Public Accountants case' studied in this paper.The fourth chapter is a comprehensive and in-depth description and analysis of the merge effect of ‘RSM CHINA Certified Public Accountants case' from the aspects of firm size,audit quality,audit cost and customer structure.The fifth chapter provides a final summary and extracts the essence of the case mentioned in the article as sublimation.This paper studies the relationship between accounting firm merge and economic consequences.Taking ‘RSM CHINA Certified Public Accountants case' as an example,this article clearly illustrated hat after the amalgamation,(1)the firm scale is rapidly expanded;(2)the quality of audit is greatly improved(3)a high-end customer base grows;(4)a higher audit premium is achieved;(5)a good brand image is established.The contributions of this paper are as follows: from the perspective of current research,the indicators used to measure the economic consequences of accounting firms include audit quality,audit fees,firm size,customer structure and so on.These indicators are always used separately,However,in this paper,we use multiple indicators to compare and describe the consequences of amalgamation so that we can carry out evaluation analysis in a more systematic,comprehensive and in-depth manner,and display the economic effects of merge more intuitively in front of readers.Last but not least,since these four indicators are derived from three different perspectives: accounting firms,customers and market,it can be said that the results of research and analysis are of more scientific rigors.As far as I am concerned,this analysis model of economic consequences for the amalgamation of accounting firms is of great importance and enlightenment,which also fills the gap in the evaluation system.