Social Sciences in China (Chinese Edition)

No. 4, 2022

 

Strengthening the Synergy of Audit Regulation: Based on Historical Investigation Tracking the Functions of the CPA Sector

(Abstract)

 

Zhou Hua, Dai Deming and Liu Junhai

 

Major cases of corporate financial fraud are a common occurrence. Interdisciplinary research tracking the trust crisis in the Certified Public Accountants (CPA) sector shows that the phenomenon is largely due to the mandatory CPA audit system introduced in the US Securities Act of 1933. In this article we propose to revise the system of mandatory CPA auditing, establish a CPA facilitation mechanism that enables the internal supervisory agencies of regulatory bodies and corporations to commission CPA services on a voluntarily basis, and implement a national audit system with enhanced regulatory synergy. Given its basis in the unified social credit code, the rational division of authority between regulatory agencies and the establishment of a unified platform of financial and accounting oversight information will definitely improve the conduct of comprehensive audits, continuous audits, and follow-up audits.