The Research On Optimum Government-regulation Of Our Country's Independent Audit

With the debacle of Enron-Andersen, Sarbanes- Oxley Act of 2002 was passed in America. Instead of self-regulation of independent audit, independent-regulation was required in the Act. Since establishment of securities market in China, the misstatement and fraud of listed companies are in endless stream. The objection on regulation mode of independent audit was raised because of the credit crisis at the same time. Those why we should regulate the independent audit and how to change the mode based on reality and basic logic of regulation have valuable theoretical and practical meanings that can guarantee healthy development of the profession.The regulation of independent audit refers to the oversight and control by regulators as a whole, over the independent audit industry at micro-levels. There are three kinds of mode of regulation: government-regulation, self-regulation and independent regulation. The reasons undermentioned indicate market failure is the necessary premise why independent audit needs regulation: public goods and externalities of audit information, information incomplete and asymmetric, the auditors are limited rational economic people with the tendency of opportunism.By comparative method of study on regulation modes of several developed countries, we find that government-regulation or self-regulation both need respective social circumstances. We analyze emphatically the independent-regulation mode that Great Britain and America adopt now. Then, by reviewing the historical evolution and current situation of independent audit regulation in China, we develop a theoretical framework of optimum government-regulation and advance some suggestions to realize the mode.This thesis's main viewpoints and innovations include: (1) this paper discusses that independent audit needs regulation based on economic meaning. At the same time, the paper points out that independent audit regulation failure may happen. (2) reviewing the history and direction of development of other countries' independent audit regulation, we obtain some conclusions that the integration of government-regulation and self-regulation is necessary tendency and the mode which government predominates is rational choice in China. (3) according to realistic factors such as history, cultural tradition, market economy modes and other social conditions of China, we find that optimum government-regulation is rational choice. Optimum government-regulation means: firstly, government-regulation is predominant and self-regulation is importantsupplement. Secondly, "degree" among them includes the scope, depth and transparency mainly. (4) in face of the problems existing in the profession regulation mode, we put forward several countermeasures and suggestions realizing the optimum government-regulation which benefit the sound development of independent audit in our country.