The Research Review of Accounting Firm Transformation 139
of the partnership organization form in accounting firm
and its effect on accounting firm.
2.2. Researches on Limited Liability Partnership
The main organization form of accounting firm is limited
liability partnership in Britain and America, so the re-
search on accounting firm transferring to limited liability
partnership is not seen much in recent 10 years, and the
study is mainly focused on only the limited liability
partnership. Such as Hamilton, Robert w. (1994) ana-
lyzed the origin of the limited liability partnership, and
further analyzed the organization form of 6 international
accounting firms. Prem Sikka (2008) analyzed the pros
and cons of capital internationalization from the point of
limited liability partnership. Carter g. Bishop made a
comparative analysis for ordinary partnership, limited
liability partnership, company org anization form, and put
forward improvement Suggestions for limited liability
partnership.
2.3. Researches on the Influence on Auditor’S
Legal Responsibility by Accounting Firm
Organization Form
Dopuch and King (l992) used experimental economics
research methods to assess effects on the supply and de-
mand of audit service by three different auditor legal
responsibility systems, including fault legal responsibil-
ity system, strict proof-no-need common fault or deliber-
ate fault legal responsibility system and no legal liability
system. Narayanan (l994) established the audit quality
and auditors legal responsibility model; through the
model analysis, he concluded that because of the propor-
tion legal responsibility system, compared to the joint
and individual legal responsibility, the auditor litigation
costs is more sensitive to the degree of efforts, when the
legal responsibility distribution rules between auditors
and company transferred from proportion legal responsi-
bility to auditors’ joint legal responsibility or auditors’
sole legal responsibility, audit quality will improve.
Schwartz (1998) established a mathematics model of
auditor legal responsibility system, fuzzy necessary at-
tention and auditing standards, through the model analy-
sis, the author reached a conclusion, the auditor effort
degree caused by the fuzzy fault legal responsibility sys-
tem, was significantly lower than the highest degree of
auditor’s efforts in clear legal responsibility system.
Through the method of constructing model, Radhakrish-
nan (l999) test the difference of investor wealth and
auditors effort degree under two different legal liability
system: attention necessary legal responsibility system
and strict attention legal responsibility system. With the
mathematical model, Ewet, Feess and Nell (2000) tested
auditor's legal liability system in the environment of im-
perfect information, litigation costs and is risk-aversion
auditor. The results of the study showed that in the envi-
ronment of imperfect info rmation, litigation co sts and are
risk-aversion auditor, auditor negligence legal system
failed; auditor would positively deviate from any given
kind of criteria. Liu and Wang (2006) established the
mathematics model of company investment decision,
auditor effort degree, audit costs an d company pricing, in
two auditor legal liability systems: negligence legal re-
sponsibility system and strict legal responsibility syste m.
Through the analysis, the authors draw the following
conclusion: auditor efforts level in strict legal responsi-
bility system is the optimal level, but in fault legal re-
sponsibility system is not.
3. Chinese Accounting Firm Organization
Research Status
It can be seen from the organization form of accounting
firm in Britain and America that accounting firm organi-
zation form of foreign mainstream countries transferred
mainly from ordinary partnership to the limited liability
partnership, and the organization form of accounting firm
in our country is mainly limited liability partnership.
Since 2010, the government stressfully promoted ac-
counting firms to the limited liability partnership, and
domestic research about the organization form of ac-
counting firm, mainly concentrated in that how account-
ing firms in our country to select the adaptable organiza-
tion form.
3.1. Researches on the Choice of Accounting
Firm Organization Form
Most scholars believed that the organization form of our
accounting firm should have international convergence,
and pick the choice of limited liability partnership as in
Britain and America. Huang Jieli (2010) thought th at our
limited liability partnership is a new accounting firm
organization form with Chinese characteristics and is
suitable for China's national conditions; Meng Xiaojun,
Yan Hui (2010)) thought that it should be a development
direction for our accounting firms turning to limited li-
ability partnership. And part of the scholars put forward
their own thinking on the promotion of limited liability
partnership in China. Qin Rongsheng (2010) thought that
we should not take "one size fits all" approach to the
transformation of accounting firm, and we should seek a
balance among the benefit protection of partner, creditors,
and the public. Yu Yumiao(2002) thought that China
cannot veto the rights for accounting firms to choose
their organization form independently, while actively
promoting the partnership restructure of accounting
firms.
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