An Analysis Of Audit Collusion Governence On Security Market

Audit collusion and financial fraudulent practices have became the main obstacle of the sound development of securities market and the protection of investors'interest and investment orders in the world。This paper is going to research how to govern the audit collusion problem in the securities market from the perspective of audit consignment mode。First of all, this paper makes a definition of audit collusion, and a comparison between audit risk and audit risk is also made。Then the practical harms are introduced, which are caused by audit collusion。After an analysis of the root of audit collusion, this paper finds that it is the present mode of audit consignment that caused audit collusion and financial fraudulent practices in the securities market。Because under the present mode of audit consignment, the interest relationship between CPA offices and management authorities make the CPA loose their independence in audit practices。Although many reform steps have been introduced, such as the consolidation of audit committee, more information disclosure of interest relation and the rule reform of financial report, the real effects are disappointed。For these steps did not remove the interest relation between CPA and management authorities。In order to govern the audit collusion problems up hill and dale, we have to change the present mode of audit consignment and set up a new checkbalance,in which all audit behaviors would restrict and supervise one another。By the way of financial statement insurance, the present audit committee consignment mode in securities market of the USA and the UK would be changed。The interest relation between CPA and management authorities would be removed as well。According to the specific condition of China securities market, this paper suggests that China should introduce Securities Regulatory Commission or State-owned Assets Supervision and Administration Commission audit consignment mode to govern the problem of audit collusion。The paper also makes an analysis of the specific system arrangements and practical operations of the two kinds of audit consignment modes mentioned above。...