Statistics of the Audit Market in China

As the world’s second-largest economy, China has seen an increase in demand for auditing services in recent years. Auditing plays the role of “economic police” and is of great significance to the healthy and orderly development of the market economy. This study does not only enrich the theoretical study of China’s audit market, but also offers suggestions for its improvement, which have practical significance for the sustainable development of China’s audit market. The purpose of this study is to examine the situation on audit market in China, analyze its scale as well as the dynamics of audit in listed companies. As a methodological basis, the author used the works of the Russian scientist E. M. Gutzeit and reports on the audit market of the Ministry of Finance of the Russian Federation. The study reveals that the audit market in China is characterized by intense growth and concentration of large and medium-sized audit organizations; it is still dominated by traditional audit services; audit fees for listed companies are positively correlated with the size of the latter’s assets. The market leaders are the Big Four — Pricewaterhouse Coopers, Deloitte & Touche, Ernst & Young and KPMG. This study gives recommendations to the Ministry of Finance of China and the Chinese Institute of Certified Public Accountants: it is necessary to improve the system of state regulation of the audit market and encourage the establishment of self-regulation mechanisms; to actively expand the scope of audit organizations; to strengthen the branding of domestic audit companies.

1. Liang Q., Zhang L. Research on the impact of big data development on CPA audit. Zhongguozhongxiaoqiye = China Small & Medium Enterprises. 2022;(3):98–99. (In Chinese).

2. Liu L. Research progress and development direction of CPA audit. Xiandaikuaiji = Modern Accounting. 2020;(7):16–22 (In Chinese).

3. Gutzeit E. M. On the methodological improvement of audit market statistics. Auditor. 2020;6(9):10–19. (In Russ.).

4. Gutzeit E. M. The market for audit services: year 2021. Auditorskie Vedomosti = Audit Journal. 2022;(3):11–22. (In Russ.).

5. Du L. Research on the impact of new situation on CPA audit and response strategy. Shenjiguancha = Audit Vision. 2022;(7):14–18. (In Chinese).

6. Qing X., Wang H., Zhang X. Non-audit services. auditor independence and its economic consequences: review and prospect. Kuaijiluntan = Accounting Forum. 2018;17(2):100–121. (In Chinese).

7. Lu W. On Audit Study in Economics. Jiaoxueyuyanjiu = Teaching and Research. 2014;(4):70–77. (In Chinese).

8. Luo Y. Research on the influence of auditors’ industry expertise on external auditing of enterprises. Caikuaitongxun = Communication of Finance and Accounting. 2022;(1):59–62. (In Chinese).

9. Xu H. Has the development of accounting firms on a larger scale improved audit efficiency. Kuaijizhiyou = Friends of Accounting. 2023;(2):2–11. (In Chinese).

10. Yin D., Cheng Y. Analysis Report on Audit Situation of Listed Companies in 2021. Zhongguozhucekuaijishi = The Chinese Certified Public Accountant. 2022;(9):12–19. (In Chinese).

11. Chen S. Analysis of the current situation and development strategy of listed company auditing. Zhongguochanjing = Chinese Industry & Economy. 2023;(2):67–69. (In Chinese).

12. Wang X. Analysis of Opinion Types of Audit Reports of Listed Companies and Audit Response. Zhongguozhucekuaijishi = The Chinese Certified Public Accountant. 2023;(1):76–81. (In Chinese).

13. Yang Y. The audit fee gap between international «Big 4» and local accounting firms. Qiyekejiyufazhan = Sci-Tech & Development of Enterprise. 2019;(10):157–158. (In Chinese).

14. Gao X., Sun Y. Revie wand Prospects of Research on “Big Four” Accounting Firms: Impacting Factors. Auditing Behaviors and Economic Consequences. Zhongguozhucekuaijishi = The Chinese Certified Public Accountant. 2022;(09):25–29. (In Chinese).

15. Liu Ya. Comparative analysis of the development of audit markets in Russia and China. Tomsk State University Journal of Economics. 2023;(61):113–135.

16. Liu Ya. The current development of audit market in China. Tomsk State University Journal of Economics. 2022(59):319–328.