Study On The Problem Of Lack Of Independence Of China's Folk Audit Based On Tripartite Game

Audit originated from the separation of the ownership and the management right, such a separation led to the asymmetry of information between the owner and the operator, in order to reduce the asymmetry, the owner of enterprises started to employ certified public accountant(CPA) to supervise and examine the implementation of the operator's entrusted responsibility. Therefore, CPA should evaluate the operator's performance independently and deliver the audit opinion objectively and fair. However, in the audit market, because of the absence of the audit clients, the operators have become the actual clients, which formed a complexion of the operators hiring their own auditors. So, in recent years, the phenomenon of audit collusion occurred constantly, audit independence suffered from serious damage, which caused widespread concern of the community; people began to doubt the CPA.Audit independence is the soul of audit, if there were no independence, the audit would have no value, and so, it is the foundation of survival and development of CPA profession. Therefore, if the CPA profession wants to make more development healthily, we must first solve the issue of the lack of audit independence. In view of this, this paper discussed the independence of china's folk audit from a new perspective—game. First of all, on the bases of the analysis of the status quo of china's folk audit, established the game model among operators, CPA and supervisors and make a qualitative analysis and test the model through a case. Through the analysis we know the impact of the change of each variable on audit independence, some of them have a direct impact on audit independent, some of them have an indirect impact on audit independence, others have a dual impact on audit independence, thereby, we will have a deeper understanding of the impact of them on audit independence. Secondly, through the analyses and test to the model and combine with the status quo of China's folk audit, this paper analyzed the reasons of the lack of independence of china's folk audit directly and indirectly. Finally, aiming at the reasons of the lack of independence of China's folk audit and in accordance with the results of the analysis of the model, proposed the corresponding countermeasures to increase the independence of China's folk audit.