The Research On The Construction Of Internal Control System In X Certified Public Accountants

In May 26,2007, CICPA published The suggestions on promoting the accounting firms to become bigger and stronger and The guidelines on the internal governance of accounting firms. These two important documents which are applied for guiding the regulatory development of accounting firms marks start of the "bigger and stronger " strategy in the CPA industry. The documents emphasize the internal governance structure and mechanism, the risk management and quality control and the partnership culture in the accounting firms. And it is indispensable for the accounting firms to design the governance structure and mechanism that are characterized by the rigorous risk management, effective quality control, transparency and checks and balance.In August 14,2012, The Ministry of Finance, China Securities Regulatory Commission, China National Audit Office, China Banking Regulatory Commission and China Insurance Regulatory Commission published The notice on the implementation of enterprise internal control standard system with different classifications and batches in the companies listed on the main board in 2012 in the general offices of Ministry of Finance and Securities Regulatory Commission. The target is to regulate the enterprise internal control system with assuring the legal and regulatory operation and management, the security of assets, the authenticity and integrity of financial reports and other relevant information, the operating effectiveness and efficiency and the achievement of development strategy.As the intermediary examining the operation and financial situation of listed companies and ipo-bound companies, X accounting firm need to improve its internal control. Whether the internal control system is sound will influence both its performance and the economic market and capital market. In order to survive and progress, it is bound to ameliorate the internal control to improve the social credibility and enhance the market competitiveness.This paper analyzes the problems and the corresponding reasons concerning the internal control of X accounting firm by focusing on the five elements of internal control system——control environment, risk assessment, control activities, information and communication and internal monitoring. Then the specific deliberations are divided into five parts to design an internal control system consistent with the operating characteristics of accounting firms: to improve the control environment, to implement the scientific risk management, to develop the complete control activities, to construct the efficient communication mechanism and to strengthen the internal monitoring. These preliminary solutions to the practical difficulties of X accounting firm can improve the level of management and operation. To reduce the auditing risk to an acceptable level will improve the management efficiency. In short, an efficient practical guideline to the management and operation can be provided.