The Valid Association Between Audit Service And Management Consulting Service Of CPA Firms

Early in the half century ago, R.K.Morze and H.A.Harlaff , pioneers in the auditing research field, pointed out that,"One will make a mistake if he claims to forbid CPAs to set foot in the management consulting service, no matter who he is; Meanwhile, it is also dangerous for CPAs unlimitedly providing the management consulting service.From the case of Enron Corporation, we have found that the adverse impact of the excessive development of the non-auditing service, which is mainly management consulting service, on the independent auditing service. Also, we have noted that the management consulting service provided by CPA firms in mainland China grows slowly and lacks of competence. How should the CPA firms choose facing the competition press from peers and the oppugn from the public? Could not the conflict between the independent auditing and management consulting service be solved? Could not the CPA firms improve their competence by developing the management consulting service or other non-auditing service? Should CPA firms return to their ever home and become a pure auditing firm? All the above problems need to be solved emergently.The thesis focuses on the equilibrium between the auditing service and management consulting service provided by the CPA firms and reviewed the equilibrium relationship from the competitive advantage theory perspective in order to improve the CPA firms'competence. Also, the thesis analyzes the auditing independence from the above equilibrium relationship as the auditing independence is one driving factor of the CPA firms'competence. Finally, the author puts forward a solution way to establish the equilibrium between the auditing service and management consulting service provided by the CPA firms in China according to the status quo in China. The thesis comprises of four parts:The first part is the preface which introduces the research background, research field, research clue and research method.The second part is the theoretical analysis. In this part, firstly clarify the concept of the auditing service, management consulting service, the double attributes of CPA firms and the meaning of the equilibrium relationship. Then analyze the influence of the departure from the equilibrium on the competence of the CPA firms. Finally, explains the substance of the equilibrium relationship and the equilibrium relationship which contributes to the CPA firms'competence.The third part is the analysis of the status quo. The research object is the typical CPA firms in mainland China. Using the data from the questionnaires designed for the thesis, analyze the equilibrium relationship between the auditing service and management consulting service and its influence on the competence of the CPA firms.The last part is conclusion and policy suggestion. Put forwards a solution way to establish the equilibrium between the auditing service and management consulting service in mainland China.