What Do Audit Firms Do?

An audit firm refers to a social audit organization that is independently established to undertake audit verification and consulting services. It belongs to public institutions with independent accounting, self-receiving and self-supporting, paid services, and paying taxes according to law. A Chinese auditing firm must be established with the approval of a provincial-level auditing agency, and it must be open for business after obtaining the business license for business registration. Receive management and business guidance from auditing agencies. The business scope includes: (1) Audit verification of financial revenue and expenditure. (2) Identification of economic cases. (3) Verification and annual inspection of registered capital. (4) Establish account books, accounting system and related consulting services. (5) Training of audit, finance and accounting personnel. ^[1]

Audit firm

According to the Regulations on Social Auditing Work of the Audit Office, the establishment of an auditing firm shall meet the following five conditions:

(1) the articles of association;

(2) office space;

(Three) meet the requirements

The establishment of an auditing firm shall, in accordance with the provisions of the "Regulations on Social Auditing Work" of the National Audit Office, follow the following main procedures:

(1) With the consent of the local auditing authority, the auditing authority at or above the provincial, autonomous region, or municipality level shall review and approve it.

(2) The audit firm established after approval must report to the local

The staff of the audit firm includes the following personnel according to law:

(1) personnel in the establishment approved by relevant government departments;

(2) employed retired professionals;

(3) Recruited labor contract personnel. In addition, neither the staff of the audit agency nor other party and government agencies can hold concurrent positions in the audit firm.

The assessment of the professional qualifications of the professional staff of the audit firm shall be conducted in accordance with relevant state regulations.

Audit institutions shall commend or reward audit offices and their staff who have strictly complied with laws and regulations and have achieved remarkable results.

Audit firms accept state agencies,

(A) delegation authority

The audit firm must conduct its business in accordance with the authority entrusted to handle its business. Entrusted authority refers to the authority granted by the principal to handle the business, that is, the principal to undertake

Auditing firm industry associations refer to industry associations jointly established by auditing firms in accordance with law. According to the Regulations on Social Auditing Work of the Audit Office, auditing firms may jointly organize the establishment of industry associations. The purpose and tasks of the audit firm industry association are:

1. Exchange of social audit work experience;

2. Safeguard the legal professional rights of audit firms and audit staff;

3 Supervise the staff of the audit firm and observe professional ethics. The Audit Firm Industry Association is an organization in which audit firms and audit staff seek self-management and self-improvement.

When auditing audit verification and consulting services, auditing firms implement the following three basic work systems:

(1) Avoidance system

The general concept of the avoidance system is that those who handle the case should avoid it if they have an interest in the case and may affect the correct resolution of the case. China's social auditing work implements an avoidance system to ensure the objectivity and fairness of social auditing work. The staff of the audit firm shall evade in any of the following circumstances; the entrusted unit shall have the right to request the evasion:

1. And commission

(I) Society

Illegal treatment refers to the treatment of violations of the "Regulations on Social Audit Work".

Overview of the audit firm system

The practice auditor system refers to the general term for various provisions of the state's management of practice auditors. The current regulations in China that stipulate the practice auditor system are the Practice Auditor System (Trial) issued and issued by the Audit Office on October 9, 1991. The purpose of formulating the System is to improve the audit system and strengthen the construction of audit firms. Improve the quality of employees, ensure business quality, and promote the healthy development of social auditing. The management agency for practicing auditors is the National Audit Office and the provinces, autonomous regions and municipalities directly under the central government audit bureaus in each region. The National Audit Office and the audit bureaus of provinces, autonomous regions, and municipalities directly under the Central Government may entrust or authorize social audit associations at or above the provincial level to assist in the specific work of managing practising auditors.

Audit firm qualifications and working institutions

As a practicing auditor, you should pass the examination. A Chinese citizen who loves the People's Republic of China, supports the socialist system, has a college degree or above, and has worked in finance and economics for more than five years. Now Chinese citizens working in audit firms can apply to take the examination of practicing auditors. The examination of licensed auditors is organized uniformly by the Audit Commission and implemented by the audit bureaus of provinces, autonomous regions, and municipalities directly under the Central Government.

Those who have obtained the qualifications for auditing professional technical positions at intermediate level or above, and have more than one year of experience in social auditing work, apply for the role of practicing auditors. Those who pass the assessment are exempted from the examination. The assessment of practicing auditors shall be organized and implemented by the audit bureaus of provinces, autonomous regions and municipalities directly under the Central Government in accordance with the provisions of the Audit Commission.

Audit firm application and approval procedures

The application and approval procedures of a practicing auditor are:

(1) The applicant shall fill in the "Report on Registration of a Practicing Auditor" and submit relevant documents, certificates, certification materials or test transcripts.

(2) The auditing office where the notifier is located reviews the declaration form, signs an opinion, and submits it to the auditing office established by the auditing office or the auditing bureau of the province, autonomous region, or municipality for approval.

(3) The Audit Commission or the Audit Bureau of the province, autonomous region or municipality directly under the Central Government shall convene a audit committee of practicing auditors composed of managers and senior experts to review the application. Those who meet the qualifications of practicing auditors shall be awarded the title of practicing auditors, registered, and issued the "Certificate of Auditor Practice in China".

The list of practicing auditors approved by the audit bureaus of provinces, autonomous regions and municipalities directly under the Central Government shall be reported to the Audit Office for the record. If the Audit Office finds that the examination and approval is improper, it shall notify the approved audit bureau to re-examine.

Audit firm responsibilities and working institutions

Certified auditors are professionals who are engaged in audit verification and consulting services in accordance with the law. The working agency of a practicing auditor is an audit firm that has been established with the approval of auditing agencies at or above the provincial level and has completed business registration.

A practicing auditor may be the director of an audit firm or the person in charge of a business project. The auditing, verification, appraisal, capital verification, and consulting report submitted by the audit firm to the client shall be signed by the practicing auditor responsible for the project. A practicing auditor shall be responsible for the correctness and legality of the report signed. The practicing auditors shall practice in accordance with the Audit Regulations of the People's Republic of China, the Regulations on Social Auditing Work of the Audit Office, the Rules for Social Auditing Work, and the professional ethics of practicing auditors. The Audit Office and the auditing bureaus of provinces, autonomous regions and municipalities directly under the Central Government shall conduct annual assessments on the performance and performance of practicing auditors, and shall be authorized to register annually.

Audit firm violation

Where a practicing auditor violates the working rules and ethics and causes adverse consequences, the audit firm where he is engaged shall report it truthfully. The auditing committee of a practicing auditor has determined that the following sanctions will be given by the auditing agency approved:

(A) Warning.

(2) Suspended the use of the title of practicing auditor for 1 to 12 months.

(3) Cancel the title of Practising Auditor and revoke the Practising Auditor Certificate. If a practicing auditor violates the criminal law and constitutes a crime, the judicial organ shall deal with it according to law.

Dismissal of Audit Firm Title

If a practicing auditor leaves the auditing firm due to transfer, dismissal, or other reasons and no longer engages in social auditing, he shall return the "Practising Auditor Certificate", and his title shall naturally be lifted. ^[2]