The Auditing Quality Of CPA: Problems And Solutions

The paper mainly studies the problem of the auditing quality of CPA by using deputation theory and asymmetric information theory etc and a perfect combination of standard studies and cases analysis, in compliance with the principles of combination of theory with practice and combination of drawing on foreign advanced experiences and blazing new trails. We draw the following conclusions:(1)To eliminate or lighten informational asymmetry between the owners and business operators, .CPA audit begins. However, CPA Audit itself faces the problems of moral hazard and adverse selection.(2)The business operators commission CPA Firms to audit in our country. Its primary purpose is to walk through the requirements of governments and associated regulations. The demands for high-quality audit are out of the voluntary aspect accordingly.(3)High-quality audit deficiency is caused by defects in the way that CPA Firms is organized and the universality of unfair competition in CPA audit market.(4)Due to faulty regulations, uncritical punishments, unsound control system and duplicate supervision and administration, the control system for CPA trade is not in place in our country.(5)In the event corporate governance structure fails to be improved in the short term, the ways such as improving the control and appraisal systems for State-owned Enterprises or experimenting with charges being entrusted to an agent by governments, should work in escalating demands for high-quality audit.(6)The arrangement for partners' mutual agency under the partnership system would effectively improve the quality of CPA audit. Limited Liability Partnership facilitates not only partners' risks to increase but also CPA Firms to grow in strength, so introducing partnership must establish the system of liability insurance for CPA.(7)Government departments should increase market concentration rate and optimize the composition of audit market by means of improving the threshold of access, purify audit market of CPA and improve the quality of CPA audit by means of strengthening supervision and inspection.(8)Helping the CPA improve the quality of audit, our country should establish the system of class action and improve the mechanism of compensation for civil liability.(9)Government departments should ensure the independence of CPA audit through sessional appointment in CPA firms and the provision on which audit operations and consultancy services are incompatible.(10)Because self-discipline and heteronomy are not contradictory, it is necessary to design and establish a strict control system for CPA trade that governmental supervision and administration is led and the trade self-restraining management is supplemented.