Audit Employment Institution Arrangement

The auditor independence has been a hot topic. Many scholars discussed the factors influencing the auditor independence, one of which is the audit employment institution. However, just a few of them have conducted a deep research on this issue. This paper aims to put forward a resolution for it in order to improve china's audit employment institution and strengthen the auditor independence.The structure (except chapter 1, which introduces the research background and related articles) is arranged as below:Chapter 2. Reach the optimum pattern of audit employment institution. Based on the contract quality of enterprises, we inspect the nature of auditing. We find two requirements of the arrangement of audit employment institution: one is to reduce the information inequality to the most degree; the other is that the employment rights should be offered to those who need auditing most. We reach the conclusion that the external shareholder should be best audit employer.Chapter 3. The audit employment institution arrangement: the preposterousness and the explanations. We find that the audit employer mainly is the management in reality. So we pose the preposterousness and explain it in three ways: china's shares arrangement, group action and history review.Chapter 4. The subject of the audit employment institution. Because of the distortment of the audit employment institution, resulting the scarcity of independence, we first seek the resolution in the corporate governance framework. We inspect several parties within the framework to see if they can be a good audit employer including the dominant shareholder, the board of directors (including the independent director and the auditing committee), board of supervisors and management with the result that none of them can be a good audit employer.Chapter 5 The innovation of audit employment institution. We should seek for external resolution since we cannot find a good audit employer within the internal corporate governance framework. We make such assumption that the insurance company and sponsor to be the audit employer should be a good choice.