Regulation Of China's CPA Industry

With the exposure of a series financial fraud cases, the validity and rationality of the system of regulation of American CPA profession which relies mainly on self-discipline is queried greatly. In China, the public are discontent to CPA after the fraud cases of some listed companies such as Yinguangxia and Maikete being disclosed, so it is urgent time to strengthen the regulation of CPA profession.The basic theories to be used for regulation are the public goods of independent audit, externalism, information asymmetry and the defects of audit methods. It is the defect of the system of audit trust and the current situation of accountants fraud that makes the regulation more necessary.There are several types of system of regulation, namely, self-discipline, government interference and independence regulation, and each has its own advantages and disadvantages. It is decided by the countries history, customs of market economy and specific social economic environment when they choose the system of regulation. China is a developing market economy country, and the CPA profession is immature, so I think that it is correct for China to choose the type of government interference as the system of regulation, which is independent of the CPA profession and belongs to the State Council, to replace the administrative function of the CICPA. Besides, China should improve the mechanism of external supervision, strengthen the quality supervision of auditing businesses and the construction of system, and perfect the related laws and rules. Meanwhile, China should strengthen emphatically the regulation of market admittance of CPAs and the public accounting firms, raise the threshold of market admittance and standardize the auditing charges.