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Study On The Problem Of Low Audit Quality On Securities Market

Posted on:2004-10-10Degree:MasterType:Thesis
Country:ChinaCandidate:M TangFull Text:PDF
GTID:2156360092485693Subject:Accounting
Abstract/Summary:PDF Full Text Request
Audit service provides reasonable guarantee for the relativity and reliability of financial information, which plays a crucial role to reduce the information asymmetry between owners and investors on securities market. But with the exposure of momentous financial fraud, audit quality draws unprecedented concern of society.The analysis focus on the most fundamental variables ------demand and supply forindependent audit service to perform on securities market. The research shows that: (1) The companies lack incentives to demand high audit quality voluntarily under the present system designed in an IPO and secondary market ; (2) Having neither economic motive inside nor law risk outside, the CPA(CertIfied Public Accountant ) will not supply independent audit service .Consistent with the result, non-market forces are inevitable choice to heighten audit quality .Our analysis is performed by Game Theory. With the CSRC' s (Chinese Securities Regulatory Commission) positive actions, it is concluded that a strengthened regulatory and a broader range of penalties to apply to improve the audit quality under existing law and legal standards.Finally, according to the research, some recommendations are brought forward:(1) Based on the analysis of demand and regulations, we should reconstruct the system environment in existence to create the voluntary demand for independent, higher quality audit service.(2) Result from the analysis of supply and regulations, we should persist in the orientation of providing incentives for CPAto supply independent audits.
Keywords/Search Tags:audit quality, voluntary demand, initiative supply, countermeasure
PDF Full Text Request
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