The Measure Of China's Audit Market Capacity

The capacity of the audit market (demand for the CPA) has an important influence on the development of itself. Through the study of the audit market, industry regulatory commissions can carry out effective supervision over the accounting firms and CPA combining with the actual supply and demand situation of the market. With maintaining a reasonable match of the supply and demand on CPA, the industry can live on and therefore develop orderly. As to how many CPA are needed in China's audit market and whether the quantity of the CPA should be expanded to 30 million as what some experts, scholars and relevant government departments advocate, we should identify the actual situation of the audit market of our country and measure out the capacity of the market using scientific methods before we answer those questions.Taking the unfair competition among the CPA as an example to illustrate the off-capacity in the audit market, this paper elaborates the contradiction between the point of the "300,000 CPA needed" proposed by theorists and the actual situation of this industry by analyzing the official documents and theories on the capacity of the audit market. Meanwhile, on the basis of the theoretical analysis, this paper applies the multiple regression method employing the factors affecting the capacity of the audit market to measure out the capacity in our country in the next few years.Through the empirical research, the result that the number of certified public accountants needed in the 2010 is only a bit more than 90,000 can be concluded, which is far less than 300,000. At present, China's audit market capacity is fairly small and an excess of CPA supply can be detected,which imposes a negative impact on the development of the CPA industry. Therefore, we should not only focus on the growth of the number of CPA in the process of promoting the audit market in our country, while generating new demands for the audit market through government operations and the market readjustment concerns more to expand the capacity of the market and to alleviate the contradiction between the demand and the supply in the audit market.