The paper takes the sample data of Shanghai and Shenzhen A share listed companies from 2016 to 2019 as the experimental group, selects Chinese mainland companies listed in Hong Kong during the same period as the control group, and adopts the DID method to test the correlation between No.138 New Regulation and audit quality improvement. The results show that No.138 New Regulation causes accounting firms to face higher pressure of punishment and litigation risks, which can play a positive role in strengthening the legal responsibility and reputation management of accounting firms, and thus can generally improve the audit quality of accounting firms. Furthermore, No.138 New Regulation has a more significant effect on improving the audit quality of accounting firms with high business scale.