Accounting Firm Internal Governance Issues And Improvements

With the turbulence in the global economy caused by American subprime lending crisis, the growth of global economy has been directly or indirectly decelerated. One of the consequences is the buildup of auditing risks that would lead to the growth of frequency of lawsuit claims to the accounting firms. This paper addresses these auditing risks and tries to sort out a breakdown of a series of internal governance problems and their remedies within the accounting firms. The methods used in this study are case studies, comparative studies, generalization, deduction, literature review, questionnaire and statistical analysis. The final aim of this study is to establish a theoretical framework prioritizing internal governance risks and their remedies in the accounting firms. This framework incorporates 11 internal risks and 20 remedies spanning 4 sections of share, human resources management, risk management and client management. It is a hope that this framework will help the accounting firms improve their audit quality, elude the audit risks, and spot the corresponding internal governance problems and remedies so that they could upgrade their internal governance and risk management and become stronger and more competitive in the global economic crisis.