Research On Effect Of Recovering 3 Powers Of Ministry Of Finance To Audit Quality

After "Enron" incident, the regulatory issues of Certified Public Accountants industry caused the unprecedented attention of the world. The most eye-catching and is going to have a far-reaching impact on the Certified Public Accountants industry is the "Sarbanes - Oxley Act" which passed throgh by the United States House of Representatives on July 24, 2002. Then, on November 15, 2002, our country also issued 19 documents,that is the Ministry of Finance recovers part of the industry's regulatory functions of Chinese Institute of Certified Public Accountants for Certified Public Accountants:withdraw the power of approving set up accounting firms,send the power to the Ministry of Finance Accounting Division;recover the power of investigating the problem of accounting firms violations, send the power to the Ministry of Finance Supervision Bureau;recover the administrative review power, send the power to the Ministry of Finance Department of Treaty and Law. which strengthened the Certified Public Accountants industry regulation, Cleared the CPA industry self-discipline management.This paper takes it as an opportunity, makes the principal-agent theory and control economics as support, draws lessons from research methods and conclusions of domestic and foreign literature, combines our country unique research background, addresses this paper's research assumption, makes use of Chinese Shanghai and Shenzhen stock markets datas from 1999-2005, proceedes the empirical study for the audit opinion types of before and after the Ministry of Finance in 2002 recover the "three powers", from the perspective of Ministry of Finance recover the "three powers" to discuss the effect of industry monitoring for audit quality, and then conclude that : Ministry of Finance recovered the "three powers" to improve the quality of audit,but the effect of monitoring exist some fluctuate. This conclusion in turn for our industry to monitor the following policy recommendations: Ministry of Finance should establish the right goals for sector-specific regulations, enhance the efficiency of goverment supervise,perfect the mechanism of goverment supervise ,strengthen supervision of the implementation of the industry in terms of strength and breadth, but taking into account the cost of audit quality and regulatory issues in strengthening the breadth and intensity of regulation at the same time should have a good grasp of the "degree".