Probe - Accounting, Auditing and Taxation

Research on the reputation dilemma and countermeasures of CPA industry

Yuqi Zhong

School of Management, Foshan University

Yujun Pang

School of Management, Foshan University

Huixi Zhou

School of Management, Foshan University

Wanling Zhong

School of Management, Foshan University

DOI: https://doi.org/10.59429/paat.v7i4.12458

Keywords: certified public accountant; reputation dilemma; legal risk

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Abstract

This paper systematically analyzes the credit crisis faced by China's Certified Public Accountant (CPA) industry, identifying two systemic issues as their root causes: "independence dilemmas caused by distorted principal-agent relationships" and "a vicious cycle triggered by low-price competition." To address these challenges, the paper proposes three governance strategies: First, reconstructing a supervisor-oriented principalagent model to correct distortions in incentive mechanisms at the source; Second, establishing a quality-driven market competition mechanism that breaks the downward spiral of low-price competition through demand guidance and price standardization; Third, building a long-term mechanism centered on supervision and reputation to strengthen external deterrence and internal constraints. The study demonstrates that only through collaborative efforts from all stakeholders can the industry's credibility be restored. The paper emphasizes that promoting healthy industry development requires measures such as enhancing regulatory transparency, implementing dual penalties, and improving personal integrity records.

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