A Study On The Impact Of Accounting Firm's Affiliate Strategy On Corporate Earnings Management

With the influx of foreign accounting firms in the Chinese market,China's accounting firms are facing increasingly fierce market competition.How to strengthen their own strength bigger and stronger,has become a domestic accounting firm an urgent need to solve the problem.In 2007 and 2009,the Ministry of Finance and the Ministry of Finance issued the Opinions of the China Association of Auditors on Promoting the Becoming and Strongening of Certified Public Accountants and the Opinions on Accelerating the Development of China's Auditor Industry,to encourage China's accounting firms to join the international accounting company,take the international road.In this context,the domestic accounting firms have chosen to join the international accounting company,thus affecting their practice,and make the audit quality,audit fees and corporate earnings management changes.However,most of the research is about the impact of the accounting firm's joining strategy on audit quality and audit fees,and the influence of the accounting firm's joining strategy on the earnings management behavior of the firm is also a research direction worthy of attention.In this paper,from 2008 to 2014 to join the international non-"four"accounting company's domestic accounting firm as the object of study,from joining before and after joining and not joined the perspective of a comprehensive study of whether the accounting firm to join the company's earnings management to curb this problem.The empirical results show that:(1)Compared with the pre-joining situation,the affiliated accounting firm can significantly inhibit the company's forward and negative accrual earnings management,but this situation can only significantly inhibit the company's manipulative cash flow and cost.(2)On the whole,the franchise strategy is better than the restraining effect on the real surplus management.(3)Compared with the accounting firm that did not adopt the franchise strategy,the firm that adopted the franchise strategy could significantly curb the negative earnings management of the company during the year and the following year.But only in the year after joining can significantly inhibit the company's operating costs,and in joining the year this trend is not significant.At the same time,we further found that both negative earnings management or manipulative production costs,joined the suppression of the year after the effect is better than joining the year.The conclusion of this paper shows that the strategy of joining the accounting firm can inhibit the earnings management of the company to a certain extent.The conclusion of this study provides some empirical evidence for the study of the effectiveness of the franchise strategy of the accounting firm,and provides the basic theoretical support for the optimization of the internationalization of the accounting firm in China.At this stage,the accounting firm through the franchise strategy to achieve "bigger and stronger" and "going out" is effective.However,after joining the accounting firm,how to effectively through the integration of resources to curb the company's earnings management behavior still need further thinking and efforts.