| As an external auditor,the accounting firm is independent between the listed company and investors and other relevant stakeholders,commissioned by the latter and hired by the former,and its main duty is to appraise the financial reports provided by the listed company to the public and issue appropriate audit opinions independently and objectively in order to protect the rights and interests of investors and relevant stakeholders.Based on the information asymmetry,if the financial information provided by the listed company has false records,concealing irregular transactions,etc.,due to the unequal relationship between different subjects,the listed company may pressure the accounting firm out of its own interests in order to obtain satisfactory audit opinions and reach some kind of cooperation,and the accounting firm insists on issuing audit opinions that may When the accounting firm insists on submitting unsatisfactory audit opinions,the two parties may disagree on the audit opinions and the listed company may end the cooperation with the firm and find another firm.Through the latest statistics,the number of listed companies changing their accounting firms in China has been increasing in recent years.Studying the reasons behind the behavior of changing accounting firms of listed companies helps us to analyze their actual operation and the deep-seated reasons behind the changes,so that investors can make correct investment decisions.The analysis of the consequences of the change behavior also helps us to summarize the rules,reduce the information asymmetry between listed companies and investors and related stakeholders,promote the improvement of related systems,and contribute to the development of China’s capital market.This thesis analyzes the motives and consequences of the change of the accounting firm of Tianmushan Pharmaceuticals Company Limited(hereinafter collectively referred to as: Tianmushan Pharmaceuticals)by studying the changes in non-financial and financial information when the accounting firm changed.In this thesis,the three changes of accounting firm of Tianmushan Pharmaceuticals from 2016 to 2022 will be selected as the object of study,and a comprehensive analysis will be conducted by combining theory and cases.In the theoretical part,the system and process of change of accounting firm as stipulated by the law will be sorted out,and then a longitudinal comparative analysis will be conducted on the types and current situation of change of accounting firms of listed companies in pharmaceutical and biological industries,including the timing and reasons for reporting the change of accounting firms of listed companies in pharmaceutical and biological industries.In the case section,the research object selected in this thesis,Tianmushan Pharmaceutical Co.,Ltd,has a total of three changes of accounting firms from FY2016 to FY2022,and it is a yearly change from FY2018 to FY2021,and its frequent changes are typical and more meaningful to study.The analysis revealed that facing financial difficulties due to operational problems,controlling shareholders or management’s request for replacement,and the need to obtain a satisfactory audit opinion and restore the company’s reputation are the dominant factors behind Tianmushan Pharmaceuticals’ frequent change behaviors.Through calculation,it is found that frequent change behaviors lead to higher audit risk,lower audit quality and negative market reaction.Finally,in view of the antecedents and consequences of Tianmushan Pharmaceuticals’ change of accounting firm,personal suggestions are given in relation to its actual situation: firstly,the listed company should strictly standardize information disclosure;secondly,the listed company should improve its internal governance system;third,accounting firms should adhere to self and scale up their development;fourth,regulators should improve the relevant system;fifth,investors should pay more attention to the dynamics of listed companies. |
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