اصلاح استانداردهای حسابداری و قیمت گذاری حسابرسی

This paper focuses on the reform of accounting standards in China in 2007 and investigates its impact on equilibrium pricing in the audit market. We find that the concentration of the audit market and the probability of issuing modified audit opinions do not significantly change, but that audit fees increase significantly after the adoption of the new accounting standards in China. Deeper analysis suggests that (1) the implementation of the new IFRS-based Chinese Accounting Standards (CASs) has increased the market risk faced by listed firms and thus auditors’ expected audit risk, causing an increase in audit fees, and (2) the degree of the increase in audit fees is positively related to the adjusted difference between net income according to the old CAS before 2007 and the new CAS after 2007. We thus conclude that the reform has had a significant impact on audit pricing in China.

This study investigates the impact of the adoption of the new accounting standards in China in 2007 on audit pricing. Adopting or widely drawing on International Financial Reporting Standards (IFRSs) has become the trend in accounting standards in the current global capital market (Daske et al., 2008; Barth et al., 2008, Barth and Taylor, 2009; IFRS). However, there is some controversy about whether or not the adoption of new accounting standards based on the measurement attribute of fair value improves accounting information quality or the resource allocation efficiency of the capital market (Dechow et al., 2009, Barth and Taylor, 2009, Xianjie, 2009 and Kai et al., 2009). As a result, it is necessary to comprehensively test the impact of the change in accounting standards on the use of accounting information. Accounting standards are an important basis that auditors use to issue audit opinions, so any change in accounting standards will affect the working base of auditors directly and thus the structure of the entire audit industry. We investigate how a change in accounting standards affects audit pricing from three dimensions: the concentration of the audit market, the attributes of the audit product and audit risk. Summary statistics show that audit fees clearly increased following the adoption of the new accounting standards. However, the concentration of the audit market has not changed. Product heterogeneity, measured as the proportion of modified audit opinions (MAOs), decreased. We thus conclude that the impact of the adoption of the new accounting standards on audit pricing has mainly occurred due to a change in expected audit risk. We also discuss how the adoption of the new accounting standards in China has affected audit market pricing strategy according to economic theory. Based on previous relevant research, we argue that the adoption of fair value measurement in the new accounting standards makes firms disclose more information about their market risk, which increases the expected audit risk of auditors and also audit fees. The original sample that we select includes all listed firms in the A share market in China between 2004 and 2008. We use the same method as Kai et al. (2009) and employ the difference between net income under the old accounting standards and net income under the new accounting standards to measure the degree of the impact on earnings information. The results suggest that the larger the difference in net income between the old and new accounting standards, the larger the change in audit fees. That is to say, the adoption of the new CAS has had a significant impact on equilibrium pricing in the audit market and has increased audit fees. The remainder of this paper is arranged as follows. Section 2 describes characteristics of the industry structure of the audit market before and after the reform of the accounting standards in 2007. Section 3 reviews the relevant literature and develops the hypothesis. Section 4 discusses the research design. Section 5 presents the empirical results and Section 6 concludes the paper.

This study investigates how the change in accounting standards in China in 2007 has influenced audit equilibrium pricing. As auditors are the direct users of accounting information, the questions of whether and how the change in accounting standards has affected the industry structure and audit prices has become a common concern for academics and business practitioners alike. We investigate the impact of the change in the CAS on audit pricing from three dimensions: the concentration of the audit market, the differentiation of audit products and audit risk. The results suggest that audit fees increased significantly after the adoption of the new CAS. However, the change in accounting standards did not increase the concentration of the audit market significantly, as larger audit firms have not displayed scale superiority or further increased their market share. The structure of audit opinions (the ratio of the number of MAOs to the total number of audit opinions) as the final product of audit services has also not changed significantly, and the specific reason why MAOs were issued in the sample period is not directly linked to the change in the CAS. We thus argue that the change in the CAS has affected audit pricing due to changes in audit risk. We analyze the potential influence of the change in the CAS on audit pricing from the perspective of information disclosure risk. The change in accounting standards makes firms disclose more information that is relevant to market risk, which increases firms’ information disclosure risk. As a consequence, auditors are confronted with higher audit risk and charge higher fees as compensation. An important implication of our research is that the increase in audit fees during changes in accounting standards should be considered as a potential cost of the reform of the rules. However, although audit fees increase from the perspective of a single firm, the resource allocation efficiency of the audit market as a whole does not deteriorate. This is because the marginal return is always equal to the marginal cost in equilibrium, and it is the increase in audit risk caused by the change in the accounting standards that leads to an increase in the marginal cost of auditing that elevates audit fees. That is, the change of rules does not widen the gap between audit prices and the marginal cost of auditing, and does not lead to a deterioration of the resource allocation efficiency of the audit market. However, the increase in the expected risk of auditors caused by the difference between the old and new accounting standards causes auditors to pay more attention to audit risk relative to asset value and to charge higher audit fees as a result. This can be regarded to a certain extent as a signal to investors to pay more attention to the market risk of the operating activities of listed firms.