| China, once suffering from all kinds of hardships and difficulties, has scored a remarkable achievement in economic development and ranked the world's second largest economy body over the past35years since her implementation of reform and opening up policies, which adds another magnificent touch to the world history. Nowadays, china, as an economic giant, has been integrated herself into the world economy, in which the economic and financial environment are much more complex and influenced by each other country due to its open property. The economic and financial environment is more and more complex, the potential risk factors are more and more thereof.It has been proven many times that Financial risk, a hidden danger for modern economic society and main causes of the financial crisis, and accumulated to some extent, will deteriorated into a financial crisis that imposes negative effect not only on one country (first broken out) but also on the whole world economy.For a long time, the prevention of micro-financial risks is specific and normative and well controlled internally by financial institutions, but as far as the macro-financial risk is concerned, fewer measures are taken by the government of a country to prevent the financial risk.The purpose of this study is to develop a dynamic early-warning system of finance audit based on the national audit immune system and its function to prevent bothmicrocosmic and macroscopic financial risks in theory and practice.The contents of this dissertation are as follows:Chapter1is the introduction.First, analyzed the background of the selected subject, identified the features of diversity and complexity of financial risk and pointed out the practical significance.Second, analyzed the research status of the selected subject. Many researchers all over the world have studied how to prevent the risks of financial audit, but few of them spent time studying dynamic early-warning system of finance audit which derived from the theory of audit immune system. Some scholars put forward: financial audit, playing a regulatory role, is dynamic and should be timely adjusted and improved in order to adapt to the changing financial environment in the world.Third, elaborate the research design, research method, research framework and ideas.Fourth, describe the key points, difficulties, main viewpoints and innovation of this research.Chapter2will discuss the literature including:Literatures relating to financial audit. In China, financial supervision is the responsibility of corresponding financial administrative departments, while financial audit is conducted by the National Audit Office. Some scholars have put forward various viewpoints and advised that framework of financial audit be optimized.Literatures on financial risk-early warning system. Risk-early warning system is used to constantly monitor the potential risks, predict their degree and take action to eliminate them before deterioration.Literatures concerning dynamic early-warning system of finance audit. Dynamic audit, a relatively new concept, refers to the real-time and process monitoring. That is, it provides a means to keep watch the changing risk, timely analyze and monitor its process, predict and state its trend of development and take measure spontaneously to eliminate them before deterioration.This chapter introduced some methods of studying the financial risk, such as signal analysis method and artificial neural network method.Chapter3,This chapter briefly reviewed the basic financial risks theories, surveyed the financial market and financial risk, analyzed the forming mechanism and the source of financial risk, outlined the new features of and made conclusions for the financial market and financial risk.Chapter4addressed the theoretical basis and innovation of financial audit. The current audit theory mainly includes the system theory, the principal-agent theory, asymmetric information theory and COSO theory. At all,I conducted respectively a in-depth analysis and discussion about the audit's immune system theory. Chapter5,the current situation of China's financial supervision, dynamic audit framework. Then I defined and analyzed the dynamic early-warning system of finance audit.The empirical methodology on preventing financial risks will be studied and detailed in chapter6. This chapter introduces and fully demonstrates several empirical research methods------survey research method, archival research method and case-study method, etc. Firstly, expounds the effectiveness of the audit to prevent financial risks. The audit immune system theory provides audit with prevention function by which it can give theoretical support for the effectiveness of preventing financial risks, monitor and forecast the potential risks when operating the economy and finance. Then evaluates and compares with the two early-warning models. Finally, discusses the path of realization of "how to prevent the financial risks".As the key part of this paper, chapter7is the construction and operation mechanism of the dynamic audit early warning system. In this chapter, I structure the feedback and analysis mechanism for financial risk by using the signal analysis method, which is used to closely monitor the forming process of microcosmical and macroscopic financial risk, capture the signal, and figure out the status and degree of financial risks. If necessary, government audit institute are always ready to take action to control the risks before deterioration. Furthermore, several empirical tests on dynamic early-warning system of financial audit are done with collected history data (from the year of2001to2010) which reflect the financial risks. The test outputs are satisfactory and therefore we can make sure that the dynamic audit early-warning system developed is reasonable and feasible.Chapter8is the implementation mechanism of the dynamic audit early-warning system. First, identify and analyze three condition factors—environmental factor, technical factor and policy factor which are the precondition of this system. Second, analyze the financial environment from international and domestic aspects. Third, analyze the audit supervision mode and auditing factors. Fourth, the comprehensive study was done for the implementation mechanism of the audit to prevent financial risks and has fully proven the possibility of the implementation of the system from the technical framework and subordination relations. Chapter9is the conclusions and recommendations. I can safe to conclude that the dynamic audit early-warning system developed in this paper can be used to monitor the macro and micro financial risks and prevent the financial crisis through theoretical and practical research. Furthermore, I recommend that the early warning system be structured in China that is facing the complicated international and domestic economic and financial environment.The main points of the dissertation:Audit supervision is of great strategic significance for the prevention of financial risks in terms of economic globalization and Chinese economic transformation. Preventive function of audit plays a unique role in financial supervision.Path of preventing financial risk in auditing is to establish and operate the dynamic early-warning system of financial audit. In operating the system, the potential risk is identified, real-time monitored, timely warned and eliminated before deterioration. At the same time, upgrade the system if necessary according to the feedback from the system.Risk monitoring and feedback mechanism are the core of the dynamic early-warning system of financial audit. The main techniques of dynamic early-warning are signal analysis method, case reasoning method, and neural network method. In addition, we can combined above mentioned methods with other audit techniques, such as risk audit, system audit, extension audit and tracking audit, to continuously improve the system.Identification index is divided into three kinds:the financial supervision risk index, financial institutions risk index and the cross influence index.Output by risk early-warning model is financial risk signal. Both audit procedure handling and signal transforming in early-warning system play a very important role in effectively preventing the financial risk.The innovation of the dissertation:Putting forward the theory of dynamic early-warning of financial audit based on the theory of auditing immune system, and elaborating its connotation, extension and possible application in systematic manner.Building a dynamic audit early-warning system to prevent financial risks, and elaborating its elements and inherent relation. Organizing the mechanism of system and customizing the model to implementing the dynamic audit early warning system on the basis of specific environment.In the dissertation, I find it necessary and feasible for china to develop a dynamic early-warning system for financial audit after an in-depth analysis of economic and financial environment in China. As we know, the financial risk has the characteristics of complexity and diversification in the current global economic and financial environment. To effectively safeguard the macro-and micro-financial risks, we need integrate relative financial institutes, financial supervision organizations and economic supervision institutes into a grand financial supervision system, by assistance of which a country can utilize modern information technology, audit immune system, internal financial audit and other extension functions to real-time monitor the potential risks and take corresponding measure, if necessary, to lower or even eliminate the risk before deterioration, and can enjoy a safe and stable economic and financial environment. |
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