The Influence Of Firm Merger On Audit Quality

China’s accounting firms have been developing towards scale.Since the Ministry of Finance issued the "Guiding Opinions on Several Issues Concerning the Expansion of Accounting Firms" in 2000 and the relevant regulations of the Ministry of Finance in 2007 to "make bigger and stronger",China’s accounting firms have adopted relevant auditing qualifications in order to cater to policies.The expansion of the scale has led to the formation of a temporary wave of accounting firms in China.Although the merger of the firm may gain higher industry status,brand reputation,greater market share and stronger competitiveness due to the expansion of the scale,the merger of the firm may also be difficult to fully integrate the client resources and management system of the former firms.The integration has a negative impact on the quality of its practice.This paper starts with the case and compares and analyzes the merger of Ruihua before and after,and draws relevant experience and reference.Ruihua’s merger history includes two mergers.This article is mainly aimed at Ruihua’s second merger.In 2013,Zhongrui Yuehua and Guofu Haohua merged to form the current Ruihua Institute.Analysis.As the “aircraft carrier” of China’s local accounting firms,Ruihua has repeatedly jumped to the top five of the top 100 national accounting firms issued by the China Association for the Advancement of Investors,and its combined experience can bring great reference to the development of China’s local institutions.This paper is mainly to carry out systematic and in-depth case analysis of Ruihua,a typical merged and developed firm,and analyze the changes in audit quality before and after the merger of Ruihua,and analyze the causes of the changes,so as to clarify the changes in audit quality Intermediate variables and conduction mechanisms.In terms of data analysis,this paper uses the data of the first merger of Ruihua in 2010 to the second merger of Ruihua in 2012 as the pre-merger,and the data for 2013~2017 is compared and analyzed.In the comparison of the quality of audit before and after,this paper establishes a measurement system including the input layer,the output layer and the regulatory layer.The input layer includes four indicators: audit fees,audit delay,number of certified accountants,and business acceptance criteria;the output layer includes two indicators;the supervision layer includes the Ministry of Finance accounting information quality inspection notice and The CICPA Practice Quality Inspection Report has two indicators.Therefore,the structure of this paper is divided into seven chapters,among which the first chapter is the research background,the research content and the research method,the second chapter is the related concept and the theoretical basis,and the third chapter is the introduction of the four stages of the merger motivation and merger of China’s accounting firms.The fourth chapter is the comparative analysis of the audit quality before and after the merger of Ruihua.The fifth chapter analyzes the reasons for the change of audit quality.The sixth chapter puts forward relevant suggestions for the merger of our firm.The seventh chapter is the full text.to sum up.After analyzing the indicators,this paper concludes that Ruihua’s audit quality declines after the merger.The reason is mainly due to the post-merger management system,personnel professional competence and firm independence of the firm.Ruihua’s post-merger branch management is complicated and fails to form a good risk control system.In addition,the combined talent resources The loss,coupled with the Ruihua office to protect the source of customers,maintain business income,damage part of its independence,reduce its own business acceptance standards,thus reducing its audit quality.The innovation of this research is that it is different from the large sample research that is common in the existing research,and the in-depth case analysis of the whole process before and after the merger,so as to find out the influence mechanism of the merger of the firms that have received little attention in the existing research on the audit quality and Specifically affect the intermediate variables.