Research Of Audit Based On Corporate Governance

The agent problem that the seperation of owner's rights and management's rights resulted in is the corporate governance's basic problem. One of the basic tasks of corporate governance is to coordinate the benefits between the owner and the operator, and try to deline the benefits conflict and agent cost which resulted from the two power's separation to the lowest, so that the owner's and the operator's benefits will realize the maximization. At the same time, auditing is one of the methods to releasing agent cost, its ( internal audit and external audit ) performance result is the key problem which needs to be studied both in the theory and practice of corporate governance.By using normal research method, this paper reviews the theory and practice's origins of auditing and corporate governance, then tries to use the entrust- responsibility theories and the information-dissymmetry theories of economics to make the inside contact between internal audit, external audit and corporate governance clearly, and further elaborates the interactive mechanism between them. By research, this article thinks that: As the Board, the management and the external audit's assistant, internal audit is an important internal governance mechanism which ensures the economic responsibility to circulate effectively. Internal audit develops the functions of supervision, evaluation and risk management in corporate governance; Meanwhile, corporate governance's model determines the mode of internal audit, then influences the internal audit's functions to play in corporate governance. Corporate governance and internal audit contact together closely, they are interactive relations. As an important external governance mechanism, external audit can control the controlling shareholder, filter the accounting information risk, ensure the quality of accounting information and protect the shareholder's rights. External audit is an important mechanism to supervise and balance the company and their operators; Meanwhile, corporate governance determines the independence of external audit, the perfect corporate governance can raise the independence of external audit. Corporate governance and external audit are also symbiotic relations. In view of the fact that internal audit, external audit and corporate governance's interactive mechanism and internal audit, external audit's present situation in our country's corporate governance, this text puts forward the strategies of enhancing internal audit's effectiveness and increasing the independence of external audit to improve our corporate governance. In internal audit aspect, through to the independence of internal audit, auditing functions, auditor's qualities, auditing techniques and other aspects to enhance the effectiveness of internal audit; through full exertiving Audit Committee's responsibilities and strengthening auditing profession's supervision to enhance external audit's independence.Because of the limited research level and only using the normal research method, therefore, this text explores the strategies which to enhance the effectiveness of internal audit and increase the independence of external audit so as to improve our corporate governance that still need to be practiced. Moreover, in the researching content, it hasn't quoted a case to elaborate the related problems, which will have an effect on discussing this paper.