Analysis On The Supervisal Model Of CPAs Industry In China

In recent years, a series of falsification scandal of accounting happened in many countries in the world, which gave rise to much regard towards Certified Public Account (CPA) industry. The auditing system is so limited that we can't prohibit auditing failure .As a consequence, we must supervise the CPAs industry. While auditing is a public goods, the exterior requirement will supervise the CPA so as to reduce the negative effect of auditing information. Meanwhile, the proprietary rights and management rights are separated. It causes the dissymmetry of information .All of these require the supervision of CPAs industry in order to uphold the public interests. The supervision of CPAs industry means the subject of supervision control and intervene CPAs. industry This includes self-discipline supervision, government supervision and independent supervision. Every pattern has its advantages and disadvantages, but they share the same purpose. That is to uphold the independence of CPA. Which model to choose in a certain period depends on the realities of a country. We have analyzed the change of supervision model in developed countries. Take, for example, the American and British model. In the two countries, CPAs industry is without supervision in the first place, and then it transformed itself into self-supervised. Further more, government intervention has been strengthened. and developed into the independent supervision model. While in Germany and Japan, marketing and self-discipline supervision is also increasing. From this we can know that the combination of government and marketing is the trend of CPA supervision model. The supervision of CPA went through three stages after the birth of the PRC. Before the association of CPA of China was set up in 1988, it was the government who supervised the CPA only. The second stage is from 1988to 2002, the quasi-government supervised it. The third stage was dated from 2002 , this was the period of government supervision. During the first stage, the CPAs industry self-supervision of China was still not founded. The accounting firm was only a branch of the government finance department. So it was not self-discipline supervision .After the CPA of China was founded, esp. in 1995, the "Two association"after the consociation the CPAs industry of China has always been imitating the American model. During this stage, the CICPA in fact has become the subject of supervision of CPAs industry. But the CICPA is only a government-elect one, and the core of industry supervision, the disciplinary power still belonged to the government. So we can say the CPA of China has not realized the self supervision. With the AnDerSin's bells going off and the pattern change of CPAs of America in 2002, the Finance Ministry of China decided to take back the supervision function that had been given to the association of CPA. So, the supervision model of CPAs industry in China returned to the full supervision of government. Although the government supervision model administrates the CPAs industry, there are still some problems. As a result, which model to choose is the biggest problem we are facing. The choice of model depends on the realities of our country, whether it can protect the public interests and whether it can help develop the CPAs industry quickly, nicely, continuously. In the long term, with the improvement of social marketing system, the combination of marketing and agent government is the certain choice. According to the present condition of CPAs industry, I think the best choice is to strength the self –discipline. the change of CPA association's function. Try to exploit the self-discipline function of CPA association. At the same time, there should be an organization whose members come from CICPA , SSC, Financial Ministry ,State Audit Office Taxation Bureau of State, People's Bank of China, so as to supervise the CPAs industry properly. To better the CPAs system and the basic policy is also important. All of this is to ensure the proper operation of auditing market. At present, the biggest problem to solve is to strengthen the supervision of CPAs industry, rebuild the confidence of the public in CPA. Only by combining the government and the market as well as the self-control and government intervention, can we develop the supervision of CPAs industry, increase the quality and efficiency, protect the public interests as greatly as possible and help CPAs profession market develop quickly and continuously.