What Is a Social Audit?

Social audit, also known as CPA audit or independent audit, refers to activities in which CPAs accept commissions, practice independently, and provide professional services to the society for a fee. Social auditing comes from the separation of property ownership and management power. The establishment of a social audit system is an inevitable requirement for China to implement reform and opening up policies and establish a socialist market economic system, and has played an important role in promoting reform and opening up and economic development.

Social audit

In China, the history of social auditing can be traced back to the period of the Beiyang warlord government after the 1911 Revolution. At that time, a group of patriotic accounting scholars

according to"

Maintain economic order

Conducive to maintaining socialist market economic order and protecting

Article 1 In order to regulate the commissioning of social audit services by water conservancy departments and affiliated units (hereinafter referred to as "units"),

society

Society in the accounting supervision system

Internal supervision of accounting work and social audit supervision

Article 27 of the Accounting Law stipulates that all units shall establish and improve

How does the certified public accountant industry fulfill its duties of social audit supervision?

The "Accounting Law", as the parent law of accounting work, establishes the legal status of social auditing over supervision of accounting work. The certified public accountant industry must conscientiously implement the duties and tasks given by the "Accounting Law", and focus on improving the quality of accounting information. To carry out a series of productive work. There are the following aspects:

Social audit improves professionalism

1. Strengthen training. In the final analysis, whether the certified public accountant industry can assume the responsibility of social supervision must have a qualified talent team. Qualified people depend on training. The leadership of the State Council has always attached great importance to the training of certified public accountants, and has repeatedly emphasized that this is the foundation of a market economy and a great cause for generations to come. In the future, work in this area should be further strengthened. In accordance with the current situation of the practice team, comprehensive mid- and long-term follow-up education work should be planned, and the goals of the staged follow-up education work should be further clarified. In accordance with the work policy of comprehensive improvement and key training, both academic education and Continuing education of employees, and strive to train more qualified certified accountants within three to five years, so that the overall quality of the team has improved significantly. 2. Improve the professional standard system and form a more complete professional standard system. The first prerequisite for the effective implementation of accounting information supervision is to resolve the operational technical and standard issues of supervision. At present, the framework of China's independent auditing standards system is basically formed. As the breadth and complexity of economic activities increase, it is necessary to continuously study the development trend of international auditing standards, and further revise, supplement, refine and improve the issued practice standards and guidelines. Provide strong technical support for certified public accountants to carry out audit assurance and service work.

Social audit strengthens moral education

An important part of ensuring the quality of accounting information is whether the CPA can maintain due professional care and professional ethics, and perform his duties diligently and act in accordance with the law. If the certified public accountants and firms lack quality awareness, responsibility awareness and risk awareness, do not follow laws and regulations and professional ethics, and one-sided pursuit of income, it will inevitably lead to inefficient social supervision and even the bad behavior of cheating with customers, leading to accounting Information distortion cannot be revealed and stopped. Therefore, it is necessary to strengthen the professional ethics education of certified public accountants, so that the certified public accountants not only have the professional ability to find problems, but also can follow the requirements of professional ethics, expose the problems in the client's accounting information, and stop frauds.

Social audit strengthens quality supervision

To improve the quality of accounting information, it is necessary to further improve the industry's regulatory and restraint system, increase supervision of CPA business work and punish penalties for violations of laws and disciplines. Focus on three areas: social audit

First, it is necessary to strengthen the supervision of auditing in key areas such as securities and futures, large state-owned backbone enterprises, and financial institutions. Anyone who finds out that the certified public accountant has violated the rules and regulations and acted in a fraudulent manner will be taken seriously, dealt with resolutely, and never compromised. Secondly, gradually establish a system for the implementation of business reporting by the firm. Firms that require auditing of securities and futures, large state-owned backbone enterprises and financial institutions are required to report their practices to industry associations for the record.

Third, strengthen the self-discipline and supervision of industry associations, establish and improve the quality supervision system, enrich the supervision team, and grant corresponding administrative punishment powers. Establish investigation committees, disciplinary committees, and technical appraisal committees to improve the authority of industry self-discipline supervision and punishment. . In addition, in order to strengthen the supervision means, we are building an information network for the entire industry, making full use of the network's convenient, fast and wide-ranging features to create conditions for the full realization of the filing system and gradually expand the scope of business supervision. Through the network, we strive to implement a monitoring mechanism for pre-registration, in-event control, and post-inspection inspection of some major audit projects.

Social audit rectifies the practice environment

The chaotic market of certified public accountants' practice, administrative intervention, and serious regional (department) protection severely restrict the effective play of the role of certified public accountants in their services, communication, notarization, and supervision, leading to disguised separation of the intermediary business, which has caused a serious malignancy in the intermediary market. Competition has brought some intermediaries and practitioners' indulgence in practice quality and professional ethics. False information has not been disclosed. It even caters to the needs of regional interests, departmental interests, and customer interests. It has cheated and cheated together, resulting in the quality of economic information. The low level has seriously disrupted the orderly operation of the economic order and must be vigorously rectified. At present, the Chinese Institute of Certified Public Accountants is implementing and carrying out the clean-up and rectification work in accordance with the spirit of the "Notice on Clean-up and Rectification of Social Intermediaries of Economic Assurance Type" issued by the General Office of the State Council on October 31, 1999. It is believed that this clean-up and rectification will definitely create a good practice environment for CPAs to conduct social audit supervision.

Social audit expands business types

As a knowledge-intensive industry, the certified public accountant industry has a large number of professionals who are proficient in accounting, auditing, taxation, management, finance and other knowledge. We must fully develop and utilize these human resources and actively develop consulting services, such as helping companies design finance Accounting system, establish and improve internal control and supervision system, provide management consulting, investment consulting, tax consulting and agency, put forward suggestions on capital structure adjustment or fund raising, assist enterprises to implement development strategy, technology strategy, organization strategy, business strategy, transformation strategy and many more. Through the services of certified public accountants, help enterprises improve management level, operating efficiency and quality of accounting information. It is believed that the promulgation of the new "Accounting Law", the strengthening of the reform and construction of the certified public accountant industry, and the rectification and standardization of the accounting market order will definitely guarantee the quality of accounting information and promote the in-depth and healthy development of China's socialist market economy