The Analysis Of Development Of Local Accounting Firms In China

The industry of Certificated Public Accountant ("CPA") is a product of commodity economy developing to certain extent. With the division of labor specialization develops and the increasingly complex economic transactions emerge, verification services provided by CPA, as an independent third-party, are playing an increasingly important role in economic development, so the CPA industry has also seen an unprecedented development. In our world, the CPA industry in those countries with more developing economy certainly grows rapidly. Since the socialist economy reconstruction resume, the CPA industry of China, which is the joint product of China's reforms and opening up and development of the market economy, has always shared common destiny with China's economy. With the continuous and rapid development of China's economy, the CPA industry will grow stronger and stronger in the course of providing services for economy development. Although China's CPA industry has seen a 20s year-old reestablishment and reconstruction period, under the circumstance of mature professional system, accelerated pace of development, favorable development momentum and furious competition of the whole industry, local accounting firms flintily face the fateful moment of life or death. On the one hand, there is intrinsic conflict between professional ethic and operation objective. Especially under the pressure and interference from the governmental regulatory authorities and the management of the auditee, the accounting information is distorted to some extent and local accounting firms` development are badly restricted and their public honesty and fairness are badly destroyed; on the other hand, after the entry of WTO, many foreign accounting firms rush into China- a big and profitable market to compete with local firms with just only 20s-year-old development history. Contrast with those matured foreign firms in respect of professional qualification, operation mechanism or overall strength; our local firms can't fight against foreign counterparties. What's more, the governmental authorities discriminate against local firms and formulate polices which are partial to foreign firms and unfair to local ones. With so many difficulties and pressures from external and internal parties, local firms get into an unprecedented predicament and they can live on only by winning other local counterparties or getting some engagement thrown away by foreignfirms. They are hardy probing their way out of the predicament.With deep feeling to local accounting firms and eager expectation to protect national brands, starting with discussion of development, significance and foreground of CPA industry, the author expatiates on the history, status quo, difficulties and its reasons of local accounting firms and makes some suggestions about how to establish healthy professional environment and formulate fair supervisory regulations, how to reform to get rid of actual predicament and how to develop healthily with the object of"To Be Stronger"based on his 5-year-old working experience in local firms.In this paper, main content of Chapter 1 to 4 are as follows: Chapter 1 Introduction, describes the background of the article, the significance of topics, research methods, the article framework, and lack of innovation, Chapter 2 Literature Review, describes the development of China's registered accountants article focuses primarily on China's domestic firms to the local community and its simple assessment of the research results,Chapter 3 reviews the history and development process of CPA industry in the world wide scope and explain the necessity and importance of the industry; Chapter 4 presents the history and development process of China's CPA industry, analyses status quo of local accounting firms, mainly in two phases to describe the development, i.e., before and after the foundation of People's Republic of China; assesses Big Four's monopoly of Chinese accounting market assessment and concludes the predicament of the local accounting firms and its reasons; andChapter 5 focuses on putting forward some suggestions on how to develop healthily to local accounting firms according to before-mentioned reason analysis. The author puts forward a viewpoint, i.e., only with collective effort of the government, CPAs, enterprises and the public, improving professional environment, perfecting professional system, expanding operating scale of local firms, improving professional quality and etc, China's local CPA industry can develop healthily and play an important and unique role in national economy development.