Research On The Relationship Between Audit Firm Governance Of Branches,Client Importance And Office-level Audit Quality

Under the influence of policy and market forces,the number and size of China's accounting firm branches are expanding rapidly.In different firms,there are differences in the level of audit firm governance of branches.Due to the lack of effective supervision and restriction,the office-level audit quality is poor.In order to improve the management of the branch offices,this paper would focus on office-level audit quality,and discuss the following problems:Whether "The Interim Measures for the management of accounting firms" issued by the Ministry of Finance in 2010,can effectively improve the office-level audit quality?Whether it can effectively improve the level of audit firm governance of branches when the headquarters and branch offices take the way of jointly auditing?At the same time,the branch office has its own customer base.The client is not important to the audit firm,but may be an important source of income to the office.With the development of the branches,the customer structures of branches have undergone a new change,whether the relationship between the customer's importance and the quality of the audit presents a new change?Can the improvement of the governance of branches effectively mitigate the damage to the audit quality?These questions need to be tested.Based on the theory of synergetic effect,principal-agent theory,system theory and game theory,this paper chooses the A-share listed companies in China as a sample from 2008 to 2015,and uses the maneuverability to measure the audit quality.This article examines the impact of the governance of branches on the office-level audit quality and its regulatory effect on the relationship between customer importance and office-level audit quality.The results show that the implementation of"the Interim Measures for the management of accounting firms" and the way in which the headquarters adopts the joint audit with the branch office can effectively improve the management level of the branch office,as well as the office-level audit quality.There is a phenomenon in which the branch office has compromised to an important customer,the improvement of the management level of branch offices can effectively alleviate the damage to the office-level audit quality.Further studies have found that the "the Interim Measures for the management of accounting firms" is more effective in restraining the manipulation of important clients' earnings manipulation by the office of local audit firm.From the perspective of strengthening the level of governance,this article attempts to open the "black box" of the internal management of audit firm.This article broadens the study of China's audit firm offices and provides academic support to further strengthen the management of the branch offices,as well as to improve the internal management of the firm and to enhance the "local"audit firm's service level.