Government Price Regulation And Audit Quality

Because of the fierce competition in China's audit market,many accounting firms takes many unlawful means to achieve their purpose to attract and maintain their customers.The most common way is to reduce audit fees unprincipled and to accept the unreasonable demands of the customers.Too low audit fees are hard to support the reasonable wage level of audit industry,which is likely to lead to the loss of a large number of excellent talents.What's more,it is not only detrimental to the development of audit industry,but will further threaten audit quality.At the same time,low audit fees and low price vicious competition between industries will damage the independence of auditors and increase audit risk.In 2010,the relevant departments of the state promulgated the "measures" management service charges of accounting firms(It's called the "measures" in the following.),and in 2011 promulgated the "on the further implementation of the CPA management service charges notice",to further standardize the management fees of accounting firms.The aim of this move is to improve audit quality through the "measures" and promote the healthy development of the audit industry.In recent years,many domestic scholars have done a lot of research on whether low price control can effectively improve the quality of audit.However,there is no definite conclusion on the study of this problem.Moreover,qualitative research is the main research.The quantitative research only compares the data in recent years before and after the implementation of the policy.Based on the delayed implementation of the policy,the conclusion is not reliable.Therefore,this paper adopts the method of empirical study to test the effectiveness of the government low price control according to the effective improvement of the audit quality.This thesis study on price competition,price control and audit quality,based on the predecessors,combined with asymmetric information theory,principal-agent theory and cost-benefit theory select samples and related data,design and build relevant models,and analyze the empirical results obtained by regression analysis,draw the conclusion and put forward the research significance.The experimental results of this thesis are as follows:after the implementation of the "measures",the audit quality will increase;the more robust the legal environment is,the higher the audit quality will be.Through in-depth analysis of research on influence of price regulation on audit quality system,this paper verified whether the price control measures can really play the improvement of audit quality,and Study on the legal environment in different regions of the differences are price control implementation and audit quality improvement effect.Its significance lies in providing theoretical support for the effectiveness of price control and how to improve the service quality and prestige of audit industry,so as to provide reasonable suggestions for the improvement and perfection of China's audit policy,and further improve the quality of service in China's audit market.