WTO challenge to China accounting firm _2759 -

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WTO challenge to China Certified Public Accountants

After joining WTO, a large number of foreign Accounting CPA firm and will practice various forms in China, the domestic accounting firms not only to face the competition with domestic counterparts, but also the face of foreign counterparts competition. Facing the new situation, China's CPA industry how to seize opportunities, meet challenges and accelerate development, we need to address the real problem. First, the current problems of accounting firms 1. Lack of independence of Certified Public Accountants. Accounting firms in China are mostly in the beginning of the establishment by government departments, research institutes, enterprises, social organizations, funded by legal persons, which corporation is the accounting firm's personnel, finance, business, names, etc. are inextricably linked. This system is easy to form two undesirable consequences: First, the lack of independent practice awareness of employees; the second is weak awareness of risk employees, leading to competition in the market practice and the practice of the disorder is difficult to guarantee quality. Affiliated to government departments, particularly the risk borne by the state, the business commissioned by the state government to start accounting firm. Although the end of 1999, China delinked accounting agency has completed the restructuring, but still lingers common form of scattered old heritage of God, which led to the objectivity of accounting agency just difficult to form. According to statistics, after Reorganization total of Certified Public Accountants 4805 home, because of association, merger, does not match the conditions, the joint had less than 1 000. Reform of the positive effects began to surface, but some CPA listed on released audit opinion, still faces administrative departments such as intervention, the listed companies has led to the audit agency and the objective interests of the right to choose the constraints, so that the CPA audit report issued by incorporation of a number of 2. And accounting intermediary market becoming more and more relevant legal provisions, monitoring system has been largely established, but monitoring the efficiency and the quality of law enforcement there are still many areas need improving. At present, the accounting firm of certified public accountants and the punishment is limited to administrative penalties, and when the certified public accountant or accounting firm for participating in fraud or gross negligence has not been formed when the corresponding civil compensation mechanism. Appears to be audited in the business failure, even if not certified public accountants audit responsibility, in accordance with international practice audit units. This is the kind of national accounting firms In developed countries, credit self-regulatory mechanism and improving the legal environment so that the perpetrators of unethical behavior for those who paid a high price behavior. U.S. financial the market 200 years of history, has not yet been a large financial services company in the criminal indictment to survive. Relatively speaking, China is in transition, although the market mechanism has been developed, the corresponding legal documents have been put forward, but far from the formation of a market economy environment, the law of the accounting agency's immoral behavior is reflected in the administrative law sanctions ,[link widoczny dla zalogowanych], but rather in the Civil as well as the development of related compensation mechanism, is still unable to break a 3. Lack of professional ability, absence of professional conduct. Currently, over 60 certified public accountants more than 52% share, the proportion of 40 years of age less than 20%, the age ranks of Certified Public Accountants serious fault. And, after qualifying for the unified national examination to enter the accounting firm of Certified Public Accountants CPA only 33% of the total, with University is also a certified public accountant degree only 16%. In addition, the existing accounting firms, 64% were established after 1990, the practice experience is limited. This all means at this stage of the professional competence of certified public accountants generally not high. National Audit Office Furniture 16, 2001, organizations have annual financial statements of listed companies accounting firm qualified audit completed in 2001 to check the quality of audit results show that the quality of service CPA Audit cause for concern. During the inspection, the relevant departments had taken the accounting firm issued 32 audit reports and audit reports of 21 listed companies involved in the audit survey found that 14 accounting firms issued 23 serious inaccuracies The audit report, resulting in 7.143 billion yuan of financial accounting information to be false, involving 41 Certified Public Accountant. The survey found that accounting firms service quality problems mainly in two aspects: First, the accounting firm has identified false financial accounting information of listed companies did not disclose the problem to conceal; the second is accounting firm of financial accounting information of listed companies there are still significant omissions in the audit. Back from a deeper level, the vertical, in addition to age, history of the fault caused by lack of experience and knowledge, the market capacity of the auditing profession, lack of demand. In other words, the normal professional capacity is insufficient demand unavoidable fact, and in a Second, our competitive environment faced by accounting firms WTO, competition in the intermediary market accounting will show diversified, multi-level, comprehensive pattern. Specifically, the following aspects: 1. Powerful competitors. International The international accounting firm has a good reputation, rich experience, strict quality control system and a sound risk control mechanisms, complemented by global market network, these are the domestic accounting firms can not match. Reflected in: (1) professional credit of the contest. WTO international firm to bring the fierce impact, while the local impact of the accounting agency is not great. At present, China's listed companies in audit, assessment of the business mainly by domestic accounting firms to perform. However, due to institutional weaknesses and the competition regime in the breeding of disregard for professional ethics, to the credit of the common defects accounting agency. International With the Securities the continuous development of market awareness and shareholder interests, growing awareness of the law, they demanded information public, the credibility of the accounting required to do their notary public agency, their choice of accounting organizations, intermediary naturally took aim at those targets and good reputation, the strength of the object. (2) training for business. WTO, China will integrate the accounting standards that had been introduced to build on some of the new accounting standards issued in order to be consistent with international accounting standards. And accounting practitioners in the country's domestic absorption, digestion and use of these accounting standards still need time. Therefore, the issue of vocational training is especially prominent. The accounting firm of foreign substance and spirit of international norms well known, coupled with not only high income and low-risk, they will be trained in accounting there are inherent advantages in the market. Training business accounting firms in China accounted for only a fraction of its total business, experience is clearly insufficient. 2. Talent competition. International On the one hand, the They will rely on its good employment mechanism, generous wages, excellent working conditions to attract the accounting agency's senior management personnel and technical personnel. This will inevitably lead to the elite of domestic outflow of intermediary market accounting, and accordingly take away some customers, there will be a new phenomenon of brain drain on the domestic market caused by the double impact of the accounting agency. On the other hand, our accounting firm the quality of personnel is not high enough, in the course of their practice may be some way or another problem. This makes the domestic accounting firms and international accounting firms in a competitive disadvantage, this should be the domestic accounting firms should first be resolved. 3. Management system of competition. Accounting firms are mostly affiliated to establish the beginning of the government, after Reorganization, shareholders will become shareholders in their length of service conversion, the general form of linear system, the CPA was added only with employee status, pay and work their paid work very asymmetric, with a lack of appropriate incentives, security system and further education. Therefore, risk awareness is weak, which is obviously not conducive to enhance the size and grade of Certified Public Accountants. The international

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