Research On The Impact Of Frequency Exchange Firms On Audit Quality Of Sunsea Company

With the rapid development of China’s social economy,the importance of audit work is increasingly prominent,especially the establishment of the audit commission of the CPC central committee in 2018,which marks the unprecedented improvement of audit status.Auditing is an important institutional arrangement to strengthen external supervision,improve the quality of economic information and maintain the order of market economy.In recent years,with the joint efforts of administrative supervision,industry self-discipline and social supervision,the independence of auditing has been continuously strengthened,and the practice level and service quality have been significantly improved.But with the $4.1 billion fine,the quality of the firm’s audit has been questioned by the public.Many enterprises even spend a lot of money to purchase audit opinions by changing accounting firms frequently in order to whitewash their statements.The number of office changes has also been on the rise in recent years,according to the CICPA.By March 2020,a total of 40 accounting firms had reported to CICPA the change information of the annual audit institution of listed companies,involving 656 listed companies.The rate of change was 120.13 percent,compared with 298 changes a year earlier.The increasing frequency of changes is thought-provoking.What impact will the changes have on audit quality? In view of the fact that the transacting frequency has become an important practical problem in our country,this paper carries out further research.A large number of scholars at home and abroad have conducted relevant research on the issue of listed companies changing accounting firms,but there are few studies on the frequent changes of a single company.Therefore,this paper will conduct research by combining literature research method and case analysis method.Firstly,I read a lot of domestic and foreign literature reviews on the relevant firm changes,the measurement standards of audit quality,and the causes and consequences of firm changes.Then from the two aspects of the firm change and audit quality to carry on the concept of the discussion.Then,it introduces Sunsea company as the case company of this paper,and analyzes the changes of audit quality after each change of the firm from four aspects: operating accrual,market response,audit cost and accounting conservatism,and finally draws a conclusion.After taking Sunsea company as an example and finding that frequent changes of accounting services can lead to the decline of audit quality,this paper proposes several Suggestions for the participants and regulators in the capital market.On the one hand,it aims to attract the attention of relevant departments,strengthen the supervision and punishment on the frequent change of firms,so as to rectify the industry ethos and reduce the asymmetry between information users and providers.On the other hand,I hope to give other listed companies and audit institutions some experience to learn from,avoid the same mistake,so as to jointly promote the healthy development of the capital market.