Study On The Relationship Between The Human Capital Of Accounting Firm And Business Performance

With the arrival of knowledge economy, our country’s capital market is also in rapid development stage, the demand for auditing services is also growing. And the accounting firm as supervisor of social economic activities, it plays an irreplaceable important role on the sides of standardize enterprise behavior, authentication enterprise financial situation and guide the capital flows. Under the background of the increasing demand for auditing services, the accounting firm of our country has grown to more than 8000. However, the accounting firm of our country which can compete with the big 4 is very few, and the one of the important indicators of competitiveness is the business performance, and it is one of the most important reason that make the accounting firm of our country become bigger and stronger and sustainable development. Accounting firm is different from general enterprise, accounting firm belong to labor intensive enterprises, human capital is its main asset, audit services provided by it reflect the competitiveness of an accounting firm, and it is one of the key factors affecting accounting firm operating performance.This paper has organizing the related literature and the theoretical achievements about human capital and business performance, grasped the latest research, and laid the foundation for the article’s follow-up studies. This paper has described the theory of human capital, enterprise performance, audit requirements, asymmetric information and property rights, use the method of empirical research, select the CPA’s education level, the auditing experience, the number of CPA, the leaders and the span of management as alternative indicators, select the natural logarithm of accounting firm’s income as alternative indicator of business performance, using multiple linear regression model empirically to analyze the influence of human capital to the firm performance. The result shows that CPA education level is higher, the more beneficial to the improvement of the business performance; the number of CPA are negatively related with firm performance; the leaders of accounting firms are positively related with firm performance, but the effect is not particularly big; the more CPA that under forty years old, the more beneficial to the improvement of the business performance. And then through the principal component analysis, we know that comprehensive human index was positively correlated with firm performance. According to the relevant theoretical research and empirical analysis, we put forward the suggestions about pay attention to the quantity and quality of the CPA, recruiting high quality talents, to speed up the pace of CPA team younger, perfect the talent incentive mechanism and so on to promote the competitiveness of the accounting firms in China.