臺大管理論叢 NTU Management Review VOL.30 NO.2

251 NTU Management Review Vol. 30 No. 2 Aug. 2020 With regard to professional organizations, this study suggests that the government initiative examined herein may not improve the quality of accounting firm practices in China. In addition, this governmental initiative also may have uneven effects on the various constituencies in this profession as well. For instance, our findings indicate that this government initiative produced results that are inconsistent with the government’s goal to strengthen accounting firm practices by improving audit quality. In contrast, it appears to have reshaped the accounting industry’s cost structure, profitability, and long- term success. Specifically, larger domestic accounting firms may benefit more from this regulatory initiative than smaller ones. To address this concern, professional organizations should carefully consider what negative consequences could arise from similar initiatives or from position statements issued by government authorities. To address these concerns, it is imperative for those in charge of professional bodies to provide additional guidance and revise existing standards when needed, so that the accounting profession can realize its full potential. Furthermore, instead of addressing more general issues in the accounting profession, it may also be worthwhile to take accounting expertise and client characteristics into account when launching these types of initiatives. As for management of accounting firms, this study shows that strong government support for the growth of domestic accounting practices and firm sizes has fueled the growth of second-tier auditors in China. This outcome supports the notion that government regulations may significantly affect firm operations, the audit market, and competition among accounting firms which in turn influence the amount of audit fees charged. Given the impacts derived from such regulatory shifts, it is essential for accounting firms to proactively monitor regulatory changes, assess their impacts, and identify the appropriate course of actions in order to confront them in more effective and efficient manner. Moreover, it is crucial for researchers to conduct additional studies to further explore other impacts of auditor-client realignment decisions and regulatory controls, so that shareholders, creditors, and market participants can benefit from an improved regulatory environment and professional oversight. Like other empirical studies, our examination has its own limitations. Since our study covers a 14-year period, certain events that occurred during this time span may have confounding effects on our findings and conclusions. Albeit we have made efforts to address some of them, there are issues still left unaddressed. For example, the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) has issued several rules aimed at improving audit quality for state-owned enterprises during