China News Service, Beijing, August 23 (Reporter Zhao Jianhua) The General Office of the State Council announced on the 23rd that the "Opinions of the General Office of the State Council on Further Regulating the Order of Financial Auditing and Promoting the Healthy Development of the Certified Public Accountant Industry" proposed to guide accounting firms to strengthen internal management.
Resolutely correct major issues that violate professional and ethical standards, crack down on accounting audit violations, and find out and investigate them together to achieve "zero tolerance", expose typical cases, and maintain industry integrity.
The internal management level of an accounting firm directly affects the quality of the practice of certified public accountants.
A small number of accounting firms pay too much attention to scale expansion and neglect internal governance. There is a certain phenomenon of "mountainism" and "division of kitchens". The foundation of sustainable development is unstable, and hidden risks have been planted.
According to the relevant person in charge of the Ministry of Finance (hereinafter referred to as the person in charge), the audit failure cases that have occurred in recent years are mostly related to problems in the internal governance of accounting firms, leading to a formal quality control.
The Ministry of Finance will formulate and promulgate integrated management measures for accounting firms, strengthen inspections and evaluations and include them in comprehensive rankings, and promote integrated management by establishing models.
In recent years, cases of audit failures of accounting firms have occurred from time to time, causing the public to question the practice ability of certified public accountants, especially their integrity.
The person in charge pointed out that the Ministry of Finance has taken measures to rectify the "hidden rules" of the industry.
Lawfully rectify the problems of unlicensed operation of accounting firms, certified public accountants practicing under the name of certified public accountants, online sales of audit reports, and certified public accountants practicing beyond their competence in the current industry, and resolutely correct major issues that accountant firms violate professional norms and ethics.
At the same time, establish an industry integrity restraint system and improve a unified channel for complaints and reports.
Recently, some companies have lowered their winning bid prices, and some accounting firms have lowered their quotations for undertaking business, resulting in unreasonable reduction of audit fees, some of which are significantly lower than audit costs, triggering low-price and vicious competition in the industry.
Low-price vicious competition not only causes accounting firms to reduce audit investment and audit procedures, which directly affects audit quality, but also triggers the phenomenon of "bad money drives out good money".
The long-term development of the industry is hindered by the difficulty of compliant accounting firms to obtain reasonable income and the loss of talents.
According to the person in charge, the Ministry of Finance is currently working with relevant departments to speed up the research, formulation and improvement of relevant regulations on the selection of accounting firms by state-owned enterprises and listed companies, and guide the formation of a quality-oriented selection and employment mechanism. At the same time, the responsibilities of corporate audit committees should be further consolidated, requiring companies to select accounting firms with high practice quality, strong independence, and good professional ethics in accordance with the principles of objectivity and fairness, and give full play to the role of certified public accountants in auditing companies. Companies that violate the regulations and accounting firms that compete with lower prices will be held accountable and announced to curb low-price and vicious competition in the industry, and provide institutional guarantees for improving the audit quality of certified public accountants. (End)