A Discussion On Demand For Audit In China's Securities Market

CPA's audit function is an important component of normal operation of the capital market. Independent, objective and impartial audit services can provide reasonable assurance to relativity, credibility of financial information. But with the Yinguangxia event, Kelon Group and other major financial fraud cases have been exposed to the public and the Audit Commission revealed routine inspection, the audit quality of CPA in the listed companies in our country has become a more and more grievous problem which keep the industry quality to be subjected to the unprecedented concern of social public.For a long time, the government had taken a series of measures aimed at CPA and accounting firm to improve audit quality, but in practice the result was unsatisfactory. In my opinion, this was mainly because of their excessive attention to the supply side for audit services from certified accountants and accounting firms regulatory perspective to study it, ignoring demand side of audit services, and do not guide and create the audit demand. From the economic point of view, in accordance with the principles of market economy, the effective demand for audit can guide supply of accounting information. Linking to demand and supply and achieving a balanced supply and demand of accounting information will be easier. Independent audit quality is an organic unity of certified public accountant and social needs, CPA's independence directly determines the quality of audit as well as certified public accountant practicing standards, yet demand-side options, which guide Certified Public Accountant's behavior, indirectly affects the audit quality. So this paper, from the perspective of demand, using the economic theory, analyzes the lack of demand for high-quality audit services and finds the causes of low quality audit .For improving our existing auditing environment, some proposals have been put forward to create the voluntary demand for high-quality audit services.The paper is structured as follows: Brief introduction to the background and significance of research and study method and structure. The first chapter clarifies the foundation of some theoretical basis, especially for the audit of the demand, laying the theoretical foundation for further analysis. Chapter 2 studies present station of the Securities Market, analyzes effect that in the transition period China's emerging Securities market had affected audit quality, from the point of view of all unities analyzes their demands for audit services. Chapter 3 gives detailed reasons to China's securities market that lacks high-quality audit services in present stage. Chapter 4, based on the regulatory and the demand side, puts forward the proposals for improving high-quality audit services in the institutional environment and specific policy of micro levels. Conclusion summarizes findings and limitations.