Analysis Of The Integration In Accounting Firms Based On Core Competence

Since the accounting firms’ reorganization of our CPA profession in1998, the native accounting firms have experienced three waves of merger. During this period, the academia has made a lot of research about the merger and integration of accounting firms, and the views of scholars have player an important role in promoting our CPA profession. But these views which guide us respectively haven’t form a systematic theory. In order to build a system which contributes to observing the integration and the growth of accounting firms in the round, we need a frame to illustrate the relations among the views.In the lately merger wave which aims to become "bigger and stronger", General Office of the State Council forwarded Ministry of Finance’s "Some Suggestions about Promoting Our CPA Profession"(we call it "Some Suggestions" for short in this paper) in October2009."Supporting10accounting firms which have core competence and provide general and multinational service" is the core content of "Some Suggestions". Enlightened from this policy, this paper which focuses on cultivating core competence for native accounting firms investigates the development of CPA profession from Republic of China period to People’s Republic of China period, makes research of the integration of accounting firms according to the theories of core competence. Besides, this paper also analyses the integration of accounting firms based on the theory which believe that integration creates value for the merger and prepares for the next growth of accounting firms.This paper firstly summarizes the research outcome of authors at home and abroad, builds theory stage for accounting firms’integration and illustrates the dialectical relationship between the core competence and the integration of accounting firms for the sake of improving the integration of native accounting firms. By investigating the development of CPA profession in China, this paper finds that native accounting firms’development and internal governance are fiercely influenced by the government and policies. Therefore, native accounting firms are too passive and slow to meets the market’s change. Due to the short time of the development of our CPA profession in addition, there is a huge gap between native account firms and the international famous accounting firms.Then, this paper forms the theoretical basis and a frame to analyze the integration of accounting firms by integrating the Michael E. Porter’s Value Chain theory and resource and capability core competence theories. Besides, this paper also accepts the Modern Theory of the Firm and Synergy theory and the view of "harmonious of people and intelligence" proposed by the authors in China when it discuss the integration of accounting firms.In the process of discussion, the paper points out that the unharmonious merged culture, the conflict of internal benefits, no highlighted brand, expanding correlative business inefficiently and the lack of core skilled people are the main problems in the integration of native account firms. At the same time, the paper argues that the dross of Chinese culture, the ignorance of improving internal governance, particular practice environment, unreasonable expanding method and the impact to human resource governance brought by the merger wave have brought on those problems. In the analysis of the cases, the paper contrasts the difference and similarities of Deloitte and ZhongruiYuehua accounting firms.At last, this paper proposes five suggestions to solve those problems. The merged native accounting firms should cultivate merged culture by combining the character of Chinese culture, integrate organization structure and management system at the aim of "harmonious of people and intelligence". Under the premise in which the staff has the consciousness of brand, the account firms can organize a group regularly to improve the setup and management of the brand. It is better for the native accounting firms to think much of connotative growth when they consider expanding business. The native accounting firms may set up a system which will afford their staff more and superior study chances for the sake of attracting excellent people.