The Study On Internal Governance Of Small And Medium Sized Accounting Firms In China

Integrity internal governance is the inevitable requirement of certified publicaccountant firms to improve the quality of practice and to mitigate risk, as well as theinstitutional basis of the accounting firms’ steady and healthy development. With thedevelopment of CPA and the outbreak of a series of audit cases, internal governanceproblems of the accounting firm has become the academic study of hotspots.Although academic research on accounting firms ’ internal management issues haverelatively deep, and improving the accounting firm agreed on many aspects of internalgovernance, but a common feature of these studies is just an overall analysis onaccounting firms that, the study was too broad, not specific. Based on contingencytheory, there is no hard and fast in the world of management mode, and as such, nointernal management mode in the same accounting firm in the world. For accountingfirms of different sizes, their internal governance model is also not the same. Thisarticle to our small and medium accounting firms for the study, thematic studies ontheir internal governance issues.The paper first sets out the concept of certified public accountants ’ internalgovernance and analyzes characteristics of the accounting firm’s internal governanceand particularities of governance within the small and medium accounting firms, andthen pointing out the internal governance issues that exist in china’s small andmedium accounting firms by combining the characteristics of the accounting firm’sinternal governance and the Specific situation of small and medium accounting firmsin China. This paper considers that the weak external environment bound，lowbreach costs, investors lack understanding of the importance of internal governanceand the internal governance systems of the firm are not perfect are the main reasonsfor the internal governance dilemma of small and medium accounting firms in china.On the basis of the above analysis, the paper presents that perfecting internalgovernance mechanism of China’s small and medium accounting firms need to focuson the following aspects: improving external environment, selecting limitedpartnership form, improving the Managers’ understanding of the importance ofinternal governance, perfecting the internal governance system and creating the right organizational culture. At last, the paper builds and improves the internal governanceof ZYH accounting firm by combining the research results and the characteristics ofZYH accounting firm, looking forward to promoting the development of firms.