The Nature & Function and Its Distortion & Regulation of CPA Firms in China

By analyzing the participation of the certificated public accountant (CPA) firms in cahoots action of enterprise accounting and the provision of enterprise false financial audit information, and based on the survey of the nature, formation and development of certificated public accountant (CPA) firms both in China and abroad, the paper deals with basic social functions performed by CPA firms in making up the market and government failure in socio economic affairs. And then from the economic interest relationship between accounting information distortion and CPA firms, the paper reveals causes and social damage of the provision of false financial auditing information and the participation in cahoots action of enterprise accounting, and further presents policy measures and suggestions to control behavior distortion of CPA firms.