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Government Audit And CPA Audit: Coordination And Economic Consequences

Posted on:2021-06-11Degree:DoctorType:Dissertation
Country:ChinaCandidate:Y H JiangFull Text:PDF
GTID:1489306251454174Subject:Accounting
Abstract/Summary:PDF Full Text Request
Recently,there are two major trends related to China‘s government audit.First,terms of reference for government audit have been expanding,and practice has continued to strengthen.It has become the leading supervision force for public sector and state-owned enterprises.Secondly,China‘s audit supervision system could not support the ?audit full coverage? yet,it needs to improve the audit supervision system and integrate audit resources.To sum up,the main contradiction to implement the ?full audit coverage? is between expanding terms of reference for government audit and lack of audit supervision resources.And building an efficient and unified audit supervision system is the key to resolve contradiction,implement the ?audit full coverage?,improving the effectiveness of audit supervision.To build an efficient and unified audit supervision system,it is necessary to clarify the status of each part of the system and the relationship between them.Including how each audit form in the system work separately,how each audit form in the system interact with each other,whether the effects could be the part of the system's operating mechanism,and what are the economic consequences of the mutual influences.This study is about the relationship between the government audit and CPA audit.Existing research has mostly focused on one part of the relationship,rarely on the systematic research about this relationship.This study attempts to build a complete research system in this field,by sorting out the mutual influence relationship between the government audit and CPA audit,exploring its consequences.Government audit and CPA audit have a dual relationship: on the one hand,both are important parts of the audit supervision system,and they cooperate with each other in audit supervision activities.When government audit and CPA audit implement a common audit or when the audit objects overlap,they mutually use each other‘s audit resources and audit power.On the other hand,government audit could supervise CPA audits in a certain way.The government audit institution may reviews the CPA audit results,and when they finds any problems,it will make an announcement or transfer them to the relevant department for punishment.Therefore,although the government audit institution is not the direct supervisor for CPA,it actually formed a supervision deterrent.The dual relationship between government audit and CPA audit has not only promoted the multi-level interaction between these two,but also provided space and possibility for the two to cooperate in the audit supervision system.Based on this,this study starts with the institutional background of the audit system in the national supervision system.From the perspective of the institutional background,the study found the possible collaboration forms between the government audit and the CPA audit,which provided the institutional basis for the research.This part of the study highlights the status and importance of the relationship between government audit and the CPA audit,under the national supervision system with the modernization of state governance.In explaining the relationship between the government audit and the CPA audit,the textbook-type concepts are not listed,but the key contents are explained in detail for the research issues in this study.Including but not limited to:(1)The differences in audit frequency,audit authority,and audit report are introduced in detail,highlighting the collaboration opportunities for government audit and the CPA audit.(2)Emphasize the dual relationship between government audit and the CPA audit,and point out the form and scope of collaboration from the perspective of institutional system.(3)Statistics on the differences between the results of the government audit and CPA audit for common audit objects,and analysis of possible reasons.Secondly,based on the dual relationship between government audit and CPA audit,explore the impact of government audit on CPA audit.Audit quality is the concentrated consequences of CPAs‘ behaviors.The study using a sample of enterprises audited by government audit office each year,because these enterprises have been audited by both government audit office and CPAs,which could reflects whether CPA audits are affected directly.This part of study found:(1)The government audit could improve the audit quality of CPAs.This improvement achieved through the "Free-rider" and "deterrent power".The "Free-rider" refers to the knowledge spillover effect of government audit,that is,in the annual report auditing,CPAs used the government audit revealed problems and the results to improve the annual report audit quality.The "deterrent power" refers to a series of risks for CPAs if there are discrepancies between the annual report audit report and future national audit results,which make CPAs pay more attention on audit quality.(2)In order to examine the influence scope of government audit on CPA audit,the study was also extended to other similar enterprises.It was found that the role of "deterrent power" infect other similar enterprises.Because of the influence of "deterrent power",CPAs were more cautious in treating other customers who might be audited by government audit office.Further,the article examines the economic consequences of the impact of government audit on CPA audit.That is,it examines what kind of economic consequences will be,depending on the different impact of government audit on CPA audit.Since both government audit and CPA audit jointly supervise the behavioral standards and quality of accounting information of state-owned enterprises,the economic consequences are examined separately from these two aspects.This part of study found:(1)The higher the degree of government audit's impact on CPA audits,the less likely it is for audited companies to violate regulations;The higher the degree of government audit's impact on CPA audits,the better the integrity,mainly manifested in less increase in on-the-job consumption(more reduction);(2)The above economic consequences are limited to the audited enterprises themselves and have not been extended to other similar enterprises.Finally,another important research goal of the study is the impact of CPA audit on government audit.According to the government audit practice process,the impact of CPA audit on government audit is divided into three stages,including pre-event impact,in-event impact and post-event impact.Pre-event impact refers to the government audit institute use the work and results of the CPA audit before auditing,which affects the focus and direction of the audit in the government audit plan.In-event impact refers to government audit institute use CPA audit resources by government purchase,which affects the human resources arrangement of the government audit and guarantees the ?full audit coverage?.Post-event impact means CPAs help the company to rectify internal control,affected the implementation effect of the government audit results.The research includes:(1)Analyze the institutional basis of the impact of CPA audit on government audit;(2)Illustrate practical basis of the impact of CPA audit on government audit by giving examples;(3)Based on the discussion,construct a influence system for the impact of CPA audit on government audit,provide a systematic idea on how government audit could use the power of CPA audits.At the same time,it also pointed out the problems in the process of improving the system.Further,the article examines the Post-event impact,namely how CPAs help to implement government audit results.Because the current implementation of national audit results by CPA audits is not a systematic arrangement,it relies on the behavior of CPAs.Therefore,the article attempts to test this non-institutional arrangement.At the current stage,what mechanism has affected the implementation of the government audit results.It was found that:(1)the "Big Four" internal control auditors are more effective in implementing the rectification of internal control after government audit;(2)the internal control auditors with industry expertise are ineffective in implementing the rectification of internal control after government audit.This shows that CPA audits promote the implementation mainly through the reputation mechanism,and whether they are with industry expertise has not played a significant role in the internal control rectification.In summary,this study may have several contributions on the following areas: First,existing studies have only focused on the one-way impact of government audit on CPA audit,but this study conducts a two-way study,improving the systematic of research in this field.Second,existing research has stayed on the impact of government audit on CPA audit,but this study further considers the economic consequences,broadening the depth of research in this area.Third,this study studies the role of government audit on CPA audit as a special supervision,enriches the literature on the impact of supervision on CPA behavior.Fourth,this study systematically explores the impact of CPA audit on government audit,and incorporates the implementation of government audit results into the impact system,broadening the boundaries of research on audit supervision system.This study may also contribute to some practical areas: First,for the government audit institute,the research helps to optimize the allocation of resources and supervision arrangement.Secondly,this paper discusses the form of audit cooperation,which provides ideas and directions for building and improving the audit supervision system.Thirdly,this article suggests the importance for implement audit results afterwards.Fourth,from the perspective of the development of audit supervision system,this study puts forward new requirements on the CPA audit.
Keywords/Search Tags:Government audit, CPA audit, audit supervision system, audit full coverage, collaboration
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