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In the trend of globalization and internationalization, the competitive enviro
nment that businesses face is more complex and diversified. Businesses need ou
tside consultants to assist them to solve managerial problems, and therefore t
he demand of nonaudit services provided by CPA firms is created. This paper at
tempts to understand the demand market of nonaudit services and related issues
from the users (buyers) point of view.The questionnaires were mailed to liste
d companies in 1998. In total, 87 useful responses were received and the respo
nse rate is 21.70%. Empirical results are summarized as follows:1. The most de
manded nonaudit service is tax consulting service, which is the specialty of C
PA firms. Whereas companies tend to buy Information technology (IT) consulting
service from professional companies.2. When choosing suppliers, companies ten
d to emphasize more on professional knowledge and the capability of industrial
analysis more. Fee is not the major consideration for nonaudit service buying
decision. The survey shows that "the reputation and credibility of CPA firms"
and "the good relationships with clients" are the most important competitive
advantages of CPA firms. However, lack of professional ability in information
technology weakens the competitive capacity of CPA firms in IT consulting serv
ice market.3. Purchasing nonaudit services from auditor is a common practice i
n R.O.C. Past experience with clients and the professional ability of CPA are
considered to be major factors.4. About 61.63% of total respondents think that
joint provision of audit and nonaudit services by auditors has no influences
on independence of auditors. If nonaudit services are provided by separate sta
ff, divisions or firms, the appearance of independence may be maintained.
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