Operational Efficiency Of China’s Accounting Firms

With the gradual improvement of China’s market economy, accounting firm as abridge between the business owners, operators and government almost throughout allwalks of life.The level of its business and the level of operational efficiency impact ofeach participant’s ability to make decisions and thus engage in fair competition in themarket,especially in the current era of information economy.Therefore, to accuratemeasure of the operational efficiency of the accounting firm,explore the root cause ofthe efficiency loss and improve the analysis of the development path is significant tothe function of resource allocation for China’s market.Since the1980s to break the shackles of the planned economy, China resumesthe registration system of accounting firms. According to the summary of the work ofthe Chinese Institute of CPAs2012", China’ total of Certified Public Accountants(including branch) are8128, Certified Public Accountants99085, and98089non-practicing member as of the end of2012. However,China’s CPA industrystatus-quo is not satisfactory. The intermediary role of the accounting firms in Chinais not fully. There are a series of questions, for example, development lags behind andinefficient. Therefore.the paper attempts from the point of view of the operationalefficiency of the accounting firm to analyze the efficiency of the accounting firmposition in order to break the situation of the international domination and to furtherenhance the competitiveness of the local accounting firms in China and the efficiencyof the sector and to contribute to the long-term development of the CPA industry.This thesis is based on the economics of the production frontier theory using non-parametric data packets envelopment analysis (DEA) method to analyzeoperational efficiency of China’s CPA in Both static and dynamic angle with hundredsof information released by the Chinese Institute of Certified Public AccountantsAssociation as the sample data source from2007to2009.The static efficiency analysis is a two-step. The first step is using DEAP2.1software to estimate the2007-2009operational efficiency of China’s CPA, then todescriptive statistics on the empirical results. The second step will be accordingaveraged CPA efficiency index2007-2009to divide local accounting firms into "localtop ten" and "local".Accordance with international big four "," local top ten "and"local ", to analyze pure technical efficiency, scale efficiency and technical efficiency.By on static analysis,we know the operational efficiency of the accounting firms inChina is increasing year by year, but the efficiency is still low. With big four"compared to the" local top ten " are basically on the same level only slightly lowerefficiency of scale, but "local" as far behind.The total factor productivity decomposition technical efficiency level oftechnology change and technical efficiency. Technical efficiency is decomposed intopure technical efficiency change and scale efficiency change. According toDEA-Malmquist productivity index dynamic model,the results show that (1) Thetechnical level of the "big four technical progress (Tch) value changes and technicalefficiency value changes (Tech) to maintain a high level of growth.domesticaccounting firms showing a polarization trend.(2) The technical level of thefundamental differences between domestic and four international gap.Economic efficiency differences showing two groups,20effective46domestically examined a growing trend but26economic benefits reduced, mainlydue to lack of technical ability and their differences. Management capabilities willexacerbate this gap to some extent.Therefore, from the point of view of the effectiveness of the accounting firm’s own growth, improving their own level of technical capacity to enhance corecompetitiveness is the key.As the same time, paying attention to the follow-up of theenterprise management level and moderate expansion of the size.As domestic development is uneven, the classification given the followingrecommendations in this article:First, for the "top ten" firms in a relatively leading position should focus on toimprove their professional level of technical capacity, to shorten the gap between thefour major international technology level. Driven by efforts to promote thecharacterization of the entire accounting firm industry technical standards productionfrontier forward, give full play to the leading role.Second, for the domestically in the middle should be aware of the limitations ofthe extensive development of the scale expansion, change in business philosophy andincrease investment in human capital, attract talent, training personnel, reservepersonnel actively.Third, for the downstream industry in the other the benefit recession, should, onthe one hand, in the short-term focus on improving the management capacity of theoperators. On the other hand, to grasp the scale efficiency to moderate expansion togrow and develop their own. For long-term development, should increase cooperationand exchange with the previous firm, to absorb the successful experience, and toimprove their technical level.