The Research On The Effects Of Audit Committee On Corporate Governance

In recent years, there are many corporate bankruptcy examples because of financial fraud ,from abroad Enron Corporation (Enron), the World Communications (WorldCom), and other mega-bankruptcy company years ago to the incidents of YinGuangsha,ZhengBaiwen occurred in China. The financial issues arising from the fraud are concerned by theory and practice professors . Therefore, with the development of stock and fund market in China, it is particularly important to improve our quality of financial information of listed companies and prevent management to manipulate profits.Although corporate governance in China has clearly defined mechanism for shareholders, boards of directors, managers of companies such as the rights and obligations of the participants, they established the corporate governance in which the level and status, and to develop a series of rules and procedures, in a bid to strengthen corporate governance. Corporate governance issues arising from corporations can not be ignored. The China Securities Regulatory Commission and State Economic and Trade Commission in 2002 in "Corporate Governance Guidelines" advised to establish the Auditor Committee. The Auditor Committee as an important institutional arrangement, represents the board of directors and bear the functions of financial reporting process,internal controls and corporate governance , so in theory the Auditor Committee can improve the authenticity and reliability of the company's financial report, prevent the occurrence of financial fraud, avoid the management of the company to use its powers to manipulate profits. However, because of China's listed company Audit Committee system to establish a relatively short period of time, and our corporate governance mechanism relatively imperfect, The Auditor Committee of corporate governance as an important fiduciary agent can effectively discharge its fiduciary duties, to "listed companies Governance guidelines ", from a theoretical and practical industry challenge. Therefore, this paper to the Board's governance effectiveness study has a practical significance.From the relevant corporate governance concept, principal-agent theory as the theoretical basis, the Auditor Committee in the position of corporate governance and operation were reviewed and revealed by the Board is to guarantee the level of corporate governance entrusted with the responsibility for the effective implementation of the economic system of this arrangement a real, on the whole clear from the Board and the relationship in corporate governance. In this paper, norms and empirical research on a combination of methods, the use of 2004-2006, the Shanghai and Shenzhen exchanges in the manufacturing part of the sample, using Logstic multiple regression model, from the Board and management relations, the Board and a certified public accountant and the relationship between the two dimensions of the establishment of assumptions, the Board's management to explore and research results, finally come to the conclusion of the article: The Board in the prevention and management of earnings management in the discharge of its control, communication and oversight responsibilities in the process of playing an active role so that standards issued by registered accountants audit opinion. Finally, from upgrading the Board's characteristics, strengthen the audit committee system of legal protection, improve the information disclosure of listed companies and other mechanisms put forward a proposal. The Board of Control in effect on the process of trying to corporate governance and corporate performance, the company internal control mechanism and external companies with effective governance mechanisms, the ultimate corporate governance mechanism from the perspective of the value-added value of the company made a useful point Exploration. But in the course of the study due to lack of relevant data in support of a more comprehensive failure of the Board governance effect of factors for analysis. And the corresponding countermeasures and suggestions.In this paper, the framework of the structure are as follows:Chapter I is the introduction, it is the research background, the significance of study, research ideas and research methods at home and abroad and the Auditor Committee of the status quo.Chapter II is the basic theory of Auditor Committee. And it conducted a comprehensive review. In brief review of the Auditor Committee development process on the basis of the principal-agent theory, the Auditor Committee in the role of corporate governance position. On the Board and shareholders, boards of directors, management and internal and external auditors, such as the relationship between the analysis on the basis of this measure to identify the effects of the Board governance of the two dimensions: the Board and management relations, The Board of Certified Public Accountants and, as well as assumptions made below lay the foundation;Chapter III of samples ,through the selection and identify sources of data from the Board and management relations, the Board and a certified public accountant audit opinion type of relations starting to establish mathematical models, the Board of corporate governance in China in the governance of empirical results.Chapter IV is the empirical testing the basic summary of the findings and conclusions of the analysis of differences and, ultimately, on how to play our Board in corporate governance in the management effectiveness of a number of measures and recommendations.Finally, this is the part of the concluding remarks. Last is on the Audit Committee to study the future of the prospect. The normative and empirical studies on the basis of the results, really explore this theory, put forward on the audit committee and the future development prospects.