The Research On Audit Frauds And Problems Of Organization Reform Of Accounting Firms

In recent years, with the disclosure of many management fraud cases, the problems of CPA(certified public accountants) are revealed too. The CPA who should have shown up the facts failed their duty. Some of them even conspired with managers to deceive public. All these lead to the loss of confidence of investors and the credit of CPA corrupts. To curb its fraud has become the common request of CPA and social public. For this problem, the paper discusses the causes and interrelationship between management and audit frauds on the basis of fraud behavior and economic theory. It further indicates that the critical point of restraining frauds is to reasonably arrange the compensation system of CPA. It also sets forth that partnership is a reasonable choice of accounting firms. On the basis of theoretical analysis the paper taking mature market economy countries such as America and France as examples makes an international comparison on the reform features of organization of our accounting firms and their deep-rooted causes and states clearly that partnership is the direction of the organization reform of our country. In order to understand the attitude of the parties involved in the game, the paper did a survey to CPA and social public and analyzed its result. The paper puts up several suggestions of policies on reform. The main points and new ideas of the paper are :(1) Audit fraud is an important path to management fraud; (2) The balance on cost and benefit is the mechanism of audit fraud while information closeness is the behavior soil of audit fraud. Therefore the restraint of audit fraud lies greatly in the reasonable arrangement and adoption of registered accountants compensation system. The partnership taking unlimited responsibility is the reasonable choice and reform direction of the organization form of accounting firms in our country; (3) The reform of partnership should not be finished overnight. It should adhere to a principle of variety. The partner should be an excellent CPA on all aspects. At the same time the partnership surrounding should be more perfected.