The Research On Partnership System Of Accounting Firms

At the beginning of open reform policy was executed, accounting firms in China generally adopted "attachment" system. Until 1990's, most of them were re-organized and chose the limited liability system. Though the limited liability system was not born to conflict with auditing, it is the important reason for low auditing quality. Theory shows partnership system will greatly improve the auditing quality in China. This new system requires the partner undertake all the responsibility for auditing risks and it helps to restrict the certificated public accounting career, which will ensure integrity. While partnership system in accounting firms now is still lack of systematical research, which hampered it widely accepted.Based on the present theory, this article has a systematical research on related problems of the partnership system. We deem that the realization of partnership system will result in high audit quality in our country, however the function of partnership system should be based on some certern conditions. Some regulations on the certification of partners are requisite to the founding of accounting firms. Only the natural person can be the candidate. Meanwhile, potential partner shall have professional qualification to ensure high auditing quality. Partner also needs considerate private belongings, which signals compensation power. Second, qualified CPA must put in non-human resource to become partner of the accounting firm, otherwise will abuse the usage of non-human resource and impair the interest of auditing report user. If above discussion is seen from the macro point of view, the interest distribution is micro explanation to analyze partnership system arrangement. Emphasizing on the distribution according to the capital input, this article reckons thatintelligence capital holders shall have the residual claim right.The innovation points of this article are: (1) mathematical mode to analyze the relationship between professional competence and private belongings. (2) Only input non-human resource can the CPA become partner. (3) The foundation for distribution according to the capital input includes not only the non-human resources have been input to the accounting firm, but also those owned by the partner outside the accounting firm. (4) Intelligence capital holder shall enjoy the residual claim right, and I struct a three-part-salary mold to propose a sharing of residual claim rights amongthem.