Research On Audit Quality Contagion Effect

The audit service quality of accounting firm is of great importance to the development of market economy.With the development of capital market,the scale of accounting firms is gradually expanding.However,a number of certified public accountants audit failure problems in a row,such as Ruihua certified public accountants from 2013 to 2021 by 17 administrative punishments,such as Francis scholars found that certified public accountants audit quality exists inside contagion effects.Therefore,this paper makes an in-depth analysis of audit quality contagion effect through cases,in order to help understand the causes of contagion and promote the improvement of audit quality.Through the method of case study,this paper takes Ruihua as the research object to explore the contagion effect of audit quality.Firstly,it introduces the merger and punishment of accounting firms,and understands the development of audit industry and audit quality.Secondly,the paper expounds the development and punishment status of accounting firms,and makes an in-depth analysis from geographical location,business contacts,personnel transfer and alumni relationship,so as to verify whether there is contagion effect between auditors from vertical and horizontal contagion.Then analyze the influencing mechanism and influencing factors of audit quality contagion.In this paper,the study found that: with the merged accounting firms,expand the scale,more auditor influx,due to the geographical location,business,staff and alumni relations and the social network is formed within the firm,in a social network spreading some low audit quality behavior,resulting in the firm’s audit quality;Secondly,the audit quality contagion effect will spread through the business quality control system,and the low quality of consolidated branch offices,imperfect incentive mechanism and poor management of total branch offices will also affect the audit quality contagion,making the low audit quality systematically exist in the firm.The innovation of this study include: the research Angle of view,the existing research mainly on the analysis of individual auditors contagion effects,from the perspective of group learning study,this paper tries to,from the geographical location,business personnel to mobilize and alumni relations and so on the concrete analysis of the auditor’s contagion effects,and provide a new Angle of view for the research on audit quality contagion effects.In terms of research content,existing studies believe that with the expansion of the scale of accounting firms,audit quality should be improved,but some firms have the opposite phenomenon.The analysis of the contagion effect of existing research mostly stays at the theoretical level.This paper takes audit quality contagion effect as the entry point,and tries to analyze the influencing mechanism and factors of audit quality contagion in the process of merger.