Accounting Firm Mergers?Audit Quality And Audit Fee

Based on the domestic merger cases from 2008—2010,this paper examines the motivation of accounting firm mergers from audit quality and audit pricing.And then further explore the specific impact of the firm's merger on audit quality and audit fees from the perspective of mergers' type and auditing clients.The findings are as follows.Firstly,although the audit quality doesn't change significantly after merger,further in terms of mergers' type,audit quality significantly increases after merger by absorption due to its better resources integration,while has no great change in the way of merger by consolidation;Secondly,in the way of merger by absorption,audit quality of retained clients obviously enhanced.While in the way of merger by consolidation,the retained clients and new clients has no significant impact on the audit quality,indicating that substantial customer integration is an important reason that audit quality significantly increases after merger by absorption.Thirdly,accounting firm merger contributes to the increase of auditing price overall,among which auditing fee that accounting firms charge new clients drop slightly,while increase when it comes to retained clients.It means accounting firm mergers'motivation is the increase in auditing fee,not in audit quality.Only if merger strengthens the substantive integration of resources and clients can it really improve the quality of the audit.