Research On The Failure Of Auditor Reputation Mechanism In China

As financial fraud cases frequently exposure in Chinese and foreign capital markets,the CPA industry's reputation crisis appeared. In a mature market mechanism,the independent auditing reputation mechanism to be able to effectivly convey information, guarantee quality,save social cost,specification and develop the capital market. However, if the market does not demand the high reputation of the audit, and punish the bad reputation accounting firms,there will be no incentives in CPAs reputation investment. If the auditor is not able to maintain high quality practice standards, it will cause harm to accounting firms, the investors and the capital market.Since Chinese market is developing in a shorter time, independent audit has not yet formed such a virtuous circle. In response to these circumstances, this article will conduct a detailed analysis on China's Independent Auditing reputation mechanism.First introduce the significance and analysis of Independent Auditing reputation mechanism research, conclude the situation of the relationship between independent auditing reputation and IPO underpricing, auditing fees, market punishment, etc. Then first find reasons of efficacy losing in Independent Auditing reputation mechanism from the aspects of reputation working chain: the distinguish mechanism,the examine mechanism,the punishment mechanism and the information mechanism. At last, offer many corresponding measures of how to improve the Independent Auditing reputation mechanism in China.In this paper, an approach to the study is: normative study,case study,comparative analysis,based on normative study as a whole.