Research On The Influence Of Domestic Public Accounting Firms' Merger On Audit Fees

Since 2000,there have been three waves of merger of accounting firms in China.The emergence of the merger wave is inseparable from the development of the audit market,however,in recent years,our government has issued a series of principles and policies to encourage accounting firms to become bigger and stronger.In March 2000,the Ministry of Finance issued "the guidance of a number of problems on the scale of accounting firms' enlargement ","alternative measures for the merger and approval of Accounting firms","Certified Public Accountants Securities,Regulations on license Administration of Futures related Business".In May 2007,the China Institute of Certified Public Accountants published "opinions on promoting the size and strength of accounting firms",and in October 2009 the Ministry of Finance promulgated "about speeding up the development of China's CPA industry a number of opinions ".In June 2012,the Chinese Institute of Certified Public Accountants(CPAs)has issued " several policies and measures to support accounting firms to further strengthen and enlarge",and so on.The implementation of these policies has further promoted the merger of accounting firms in China.However the academic community has studied the merger effect of accounting firms from different angles.There are few literatures on the relationship between the audit fees and the merger of accounting firms.This paper takes economies of scale theory,brand reputation theory,insurance theory,differential service theory as the theoretical basis of the full text.The difference-in-difference method is used to examine the impact of the merger behavior of accounting firms on audit fees.Taking the combined accounting firms from 2006 to 2013 as the research object,this paper selects the audit fee data of the three years before and after as the research sample(that is,the audit fees of the A share listed companies listed in Shanghai and Shenzhen stock markets from 2003 to 2015),and uses Excel and Stata11.0 to collate and process the data.Based on the Simunic audit fees model,through regression analysis to draw relevant conclusions.Through the empirical analysis,this paper draws the following conclusions: First,the behavior of accounting firm merger will raise the audit fee level.Second,if there is a large accounting firm in the merged accounting firm,it will bring about the increase of audit fee;By contrast,mergers between small accounting firms do not raise audit fees.Third,there is a significant positive relationship between cross-regional merger and audit fees,but there is no significant correlation between non-cross-regional merger and audit fees.