Research On The Impact Of The Client Importance On Audit Quality Of Accounting Firms And Branch Offices

The research on the economic dependence and audit independence of accounting firms on important customers has always been an important issue in capital market research.In China,after the transformation of accounting firms into special general partnerships at the end of 2013,the risk awareness of accounting firms and certified public accountants has been increasing.In the process of practicing,especially in the face of important customers,it is necessary to balance legal responsibility and economic dependence.Therefore,theoretically,the audit quality should be improved.Most previous studies have concluded that customer importance impairs audit quality,but the research background is based on the research before the completion of the accounting firm restructuring,especially the further research from the head office and branch level has not been involved.Based on the above realities and research results,it is of great significance to study the impact of client importance on audit quality after the completion of the firm transformation,and to explore the root cause of the results from the level of head office,branch office and branch office in different forms.On the basis of reviewing the previous literature,this paper,with the help of customer relationship management theory,double principal-agent theory,deep pocket theory and enterprise competence theory,analyses the impact of customer importance on audit quality from three aspects: the whole of the firm,the headquarters and branches,and the branches with different forms of establishment.Complete conversion of 31 in 2013 certified public accountants audit and its 2014-2017 9059 motherboard a-share listed companies as samples,the multivariate regression model is built with the empirical test found that:(1)after the transformation,client importance of the firm has no significant impact on audit quality at the whole level of accounting firms.This shows that after the conversion of the firms,the legal liability has been continuously strengthened,and the problem of customer importance impairing audit quality has been improved.(2)The general office and the firm's overall research conclusions are consistent,but compared with the general office,the degree of impairment of customer importance to the audit quality of the branch office is more serious,which shows that after the conversion.For the important customers,the general office will be more cautious in the process of practice because of the consideration of reputation loss and litigation risk;and the unequal responsibilities and benefits of branch offices result in their failure to strictly comply with the overall quality control standards of the firms.(3)Further differentiating the different forms of establishment,it is found that the importance of customers has more serious impairment on the audit quality of the merged branch than that of the newly established branch.This shows that firms may not integrate the resources of the merged branch offices sufficiently and effectively,and transform the resources into core competencies.As a result,although the two types of branch offices have the same resources,there are obvious differences in audit quality when they face important customers.Based on the above conclusions,this paper puts forward some suggestions on improving the civil compensation mechanism,strengthening the branch important customers professional quality supervision and customer audit recommendations to integration of the resources,etc,in order to provide theoretical support for relevant regulatory departments to strengthen the regulation and supervision of audit market and formulate industry policies,and promote the healthy development of China's capital market.