Study On The Effectiveness Of CPA Audit Adopted In Z Public Hospital

Ministry of Health along with the Ministry of Finance has jointly issued Accounting System for Hospitals in December2010, which requires the published financial reports of all the public hospitals within China should be audited by certified public accountant (CPA) according to the relevant laws and regulations, and it should be implemented by1st January2012. This accounting system has brought CPA audit to the public hospitals in China. In addition, Chinese government has issued the Suggestions about Deepen the Medicare Reform and the Recent Important Implementation Plan of Medicare System (2009-2011), and the suggestion has outlined the purpose and the direction of further deepening the Medicare system reform. The new Medicare Reform suggestions proposed that the ownership and control right of hospitals should be separated, and CPA audit should be adapted in public hospitals in order to enhance the external oversee and restraint mechanism.The main purposes of CPA audit of public hospitals are:(1) enhance the external oversee and protect the interest of capital owner;(2) ensure the truth and reliability of hospital’s financial report;(3) improve the effectiveness of internal control system;(4) reduce the operating risk and improve the profitability of public hospitals. Then, whether CPA audit actually achieve its goal after adapted to the public hospitals? Namely, whether the CPA audit in public hospitals is effective?This paper has analyzed the effectiveness of CPA audit in public hospitals through the approach of theoretical analysis and case study. Firstly, the background and meaning of choosing this topic, the reason of care choosing and the structure of this paper are outlined in Chapter1. Literature Review of hospital’s audit in China and foreign countries and CPA audit are presented in Chapter2, and this chapter also included the motivation of adoption of CPA audit to China’s public hospitals, in order to discover the purpose of CPA audit adopt to public hospitals. The background information of the case is described in Chapter3, as well as the typicality of the Z hospital case. In Chapter4, the writer is trying to find the impact of CPA audit on accounting information quality, internal control, and financial performance of Z Hospital through case study, in order to find the effectiveness of CPA audit in public hospitals. In the last Chapter, there is a conclusion of this paper and some suggestions.Through the study in this paper, I have draw the conclusion that the CPA audit in public hospitals is effective in increasing the quantity of hospital’s accounting information, improving the management level of the hospital, enhancing the internal control system, reduce the operating risk, and increases the financial performance. But, it still has some weaknesses which we should make improvement.