Research On The Effect Of The Transformation Of China’s Accounting Firms Form

In 2010,the Ministry of Finance required large-scale accounting firms to be converted into limited liability partnerships by the end of the year,encouraging medium-sized accounting firms to be converted into limited liability partnerships before December 31,2011.It undoubtedly brought the audit market a new round of shocks.This paper adopts a combination of theoretical analysis and empirical analysis,according to the related research of audit risk and the auditing firm’s form transformation,it summarizes and analyzes the effects that the form change may bring to the auditing firms,including increasing the audit fees and improving the audit quality.We propose some hypotheses and use the data of A-share listed companies from Shanghai and Shenzhen Stock Exchange between 2008 and 2016 to do our analysis.The main research conclusions of this paper include:(1)The form transformation does not have a significant impact on the audit fees,but the audit fees of non-Big10 ones increase more significantly than Big10 after the form transformation;(2)The reform does not bring about a significant improvement in the audit quality,but big10 are more able to curb earnings management than non-Big10 auditing firms;(3)The form transformation is positively related to auditing firm changes,and the positive correlation was weakened by the audit of Big10 auditing firms in the previous year;(4)The positive correlation between form transformation and audit fees was weakened by the acceptance of customers who change from another auditing firm in the non-Big10 group;(5)The form transformation inhibits the purchase of audit opinions caused by the change of the auditing firm,and Big10 strengthens the suppression relationship;(6)Further analysis found that the auditing firms is changed from non-Big10 to Big10 more likely,and the competition between auditing firms is also more fierce.This shows that the competitiveness of non-Big10 s has declined after the transformation,which is initially in line with the goal of incouraging large and medium-sized auditing firms becoming bigger and stronger,promoted by the CICPA and the Ministry of Finance.However,it may also be accompanied by some problems that require the relevant departments to pay attention in a timely manner.For instance,whether the competition brought about by the restructuring will cause vicious competition.The contribution of this paper is to summarize the sources of audit risk and themeasures that the firm can take in response to audit risks based on the research systems of domestic and foreign scholars firstly.Secondly,it has enriched our research on audit risk and form transformation.The related research on form transformation and firm change has been added,and then from the perspective of the firm’s scale,the impact of the form transformation varies among the firm’s sizes.In addition,it has enriched our research on the change among firms.Most of the existing research focuses on the influence of the change of the firm.This article examines the impact of the system of change on the firm’s change from the perspective of the system,and the role of the firm’s changes in the system and other explanatory variables.Then,it made up for the lack of time.Previous studies have mostly concentrated on the data of one or two years before and after the conversion.At the same time,the transformation of the firm is only the first step to make the firm bigger and stronger.It is hoped that through its research,we can discover the current status of the audit market in our country and provide some direction and recommendations for regulating the transformation of the form.