Research On Internal Control Of The ABC Accounting Firm

Accounting firm is one of the most important supervision organizations in the process of national economic construction,and it is an important force to ensure the competitiveness and fairness of the market economy.The promulgation of relevant documents in 2009 by the state shows that the country is highly concerned about the development of the CPA industry.In such an era,accounting firms are facing a historic opportunity.But in the rapidly changing capital market,external risks are increasing.Futhermore,late start,small scale,uneven quality of personnel and weak overall strength lead to a weak ability to withstand and resist risks for accounting firms.So accounting firms are also facing great challenges,they are unable to respond to the wave of the capital market timely and effectively.Therefore,accounting firms must first improve their risk tolerance and make good internal governance to deal with the economic risk of the market and achieve the strategic objectives that the accounting firms become bigger and stronger and get the healthy and steady development.Accounting firms should improve the ability to withstand risks and carry out comprehensive risk management activities to make internal governance better.With the development of capital market and national economy,the public increasingly rely on the audit report issued by accounting firms as the basis for investment decision.However,once the enterprises go bankrupt,investors and creditors usually prosecute the accounting firm to compensate for the loss.Therefore,it has brought enormous pressure and audit risk to the CPA.So,the establishment of the system of internal control is very necessary for the CPA to avoid the audit risk,standardize the audit process and assure audit quality by providing a good working environment.In this paper,the author summarizes the existing problems and causes of internal control of ABC accounting firm by means of theoretical analysis and case study.Based on the five elements of internal control and the characteristics of accounting firms,the author puts forward a systematic and feasible scheme for the problems from the perspective of risk management.The author hopes that this case can be used as a reference for the internal governance of the medium-sized accounting firms in our country.This paper is divided into five parts.The first part mainly introduces the research background,significance and summarizes the research results of domestic and foreign scholars.The second part focuses on the analysis of the particularity between the accounting firm and the general enterprise.And according to the characteristics of the accounting firm and the theory of COSO report,the author summarizes the internal control concent which is suitable for the accounting firms' business model.The third part focuses on the analysis of the loopholes and causes of the internal governance of ABC accounting firm.The fourth part is the recommendations for improving ABC accounting firm internal control governance.The author mainly puts forward targeted and feasible suggestions from the control environment,risk awareness,control activities,information and communication as well as supervision and evaluation.The fifth part is the summary of the above.