Study On Internal Control Of Accounting Firms In China

Accounting firms is necessary to the market economy, and its main function is to audit the relevant information in order to serve the capital markets. Internal governance of accounting firms are related to the standard management, quality of their service and their development. The Chinese Institute of Certified Public Accountants (CICPA) attached great importance to Chinese accounting firm's internal governance issues, and issued the "The guide to internal governance of accounting firm" in May 26, 2007. The guide to internal governance of accounting firm includes the guiding ideology of internal governance, management structure, governance mechanisms, internal control, enterprise culture and norms of information disclosure. It is a guiding document for internal governance of accounting firms.In this paper, we adopted some basic theories, such as the assumption of rationalist, the game theory, and some management theories. And we adopted some analysis methods, such as comparative analysis, deductive and inductive methods, model analysis on internal governance. First of all, we analyze some factors to the internal governance of accounting firms in the paper, such as the public products of accounting firms, asymmetric information of accounting firms, human capital of accounting firms and the environments of accounting firms; Secondly, we take some international accounting firms as benchmark in the paper, such as PricewaterhouseCoopers, Ernst & Young, KPMG and Deloitte; Thirdly, we analyze some problems on internal governance of accounting firms, including the organizational forms of accounting firms, the incentive mechanism and binding mechanism of accounting firms, the external and internal environment to internal governance of accounting firms, the human capitals of accounting firms and so on; Finally, we propose some measures and ideas about the internal governance of Chinese accounting firms.There are some innovations in the paper. We take the environments as one of important factors to internal governance of accounting firms, and we analyze the differences of environments between Chinese accounting firms and foreign accounting firms; we define the complexity of human as the rationalist; we introduce modern analysis tools on management; we introduce management models.