Research On Financial Statements Insurance In China

The Auditor Independence and the protection of the investors'benefit are concerned when the audit failures such as Eron, Worldcom, Guangxia and Lantian occurred. The research indicated that the lack in auditor Independence result in the audit failure. And the lack in auditor Independence is mainly caused by the"management control"in audit relationship. A new aspect of the innovations to audit relationship is that the forth party, who is independent to both managers and shareholders, engage the auditor. Financial statements insurance brought up by Renon, in which the auditor is engaged by insurer, is mostly supported.The financial statement insurance is proved by system economics firstly. The related group such as the investors, auditors, public company and the government can benefit from the financial statements insurance. So the innovation is economic feasible. The focus of the thesis is to make up a framework of the financial statements insurance in china, based on both the financial statements insurance theory and the insure operation. Then the character of financial statements insurance, insurer, insurant, the third person and the agency are defined and suggested. The process, which is divided into insuring, accepting insurance and compensation, is proposed. At the last part is about the supervision and information disclosure, which will ensure the financial statement insurance operating well and moving to the goal.