The Audit Committee System: Weakened Function And Improving Advices

The Audit Committee is an important system in corporate governance; the Board is an independent financial management strength. It strengthens the independence of the auditing of certified accountants, to strengthen the veracity and reliability of financial report. Through the establishment of the Board of the listed company, the company can establish a control mechanism on the company's internal information disclosure. the quality of accounting information, independence internal and external audit and oversight function. In advanced countries. The Audit Committee has contributed much to corporate governance'development and perfection. In 2002, the Board was formally introduced to listed company. In this nearly six years of the specific implementation process, the Board did not fully play its role. In this context, the author intended to conduct in-depth study and exploration to the Audit Committee'weanken role, and then give some views and suggestions to the development of the Board in China.The first chapter is the introduction of the paper. This part is a comprehensive summary of paper including the background, the significance of topic, this area of the research and analysis at home and abroad, the paper's contents and methods. The second chapter is the theoretical foundation of the Audit committee System. This chapter provides theoretical foundation to the paper with principal-agent theory and trade tip theory. The chapter III gave the Board's current analysis of the distribution characterisics by 2003-2005, 1392 listed companies in the city of Shenzhen and Shanghai data acquisition; Chapter IV is the cause analysis that the Board's role was weakened. This chapter summarizes the causes that why audit committee system'role was weakened, including neglecting the Board's position; China's state-owned listed companies have too much shares; members of directorate lack independence, the Audit committee system is in conflict with the Board of supervise; lacking supports of laws and regulations; Chapter V is how to strengthen the role of the Board including establishing a modern corporate governance mechanism of education and improving the ownership structure and the corresponding independent director system, coordinating the relationship between the Audit Committee and the Board Supervise; formulating and improving relevant laws and regulations.