Who Should Have The Right Of Selection Of Auditors?

The role of CPAs is to increase the reliability of the information,thereby reducing the information users' relevant decision-making risks. The CPA corporate purpose is to reveal some false accounting information or proof of their fairness. Therefore, the CPA conduct an independent audit for the Company's finance plays an important part in maintain financial capital market.However, the CPA did not properly implement audit responsibilities. Listed company's accounting scandals have exposed frequently, and have caused investors'tremendous loss, as well as have damaged the reputation of the capital market and listed company's credibility.With the world's economy developed, the scope of services of accounting firms also expanded, and enter into new areas. However, commercial relations have also become more complex, CPA's audit independence has been faced with an unprecedented threats and concerns, and national regulatory authorities are also involved.Scholars and the relevant regulatory authorities made many reforms to the audit independence, including the establishment of audit partner rotation. But, why do the results achieved very little? Imagine, such a situation, whether can simply find a cause from CPAs, rather than to find a solution alternative from audit selection system? However, for this problem, the academic community did not form a unified view. This paper attempts to analyze the current representative audit selection right system-the Commission model, the financial statements insurance model, the security commission model. On this basis, to get to a suitable Chinese through game theory analysis and mathematical derivation to make an in-depth analysis, in order to find an optimal audit selection system.The contents of this paper are divided into six chapters. The first chapter is the Introduction, which outlines that from the sovereignty of the accounting scandals at home and abroad frequently to the importance of the independence of Certified Public Accountants. Last, scholars came to realize that the audit selection system on the impact of the independence of Certified Public Accountants.In addition, the selection also includes the literature review of audit selection, as well as with the independence of the relevant literature review, research objectives and methods, the contribution of research and innovation. The second chapter puts it focuses on theory of the right of audit selection. Described that under the conditions of a modern economy in our country, what is the status of the right of audit selection. Then, the author describes the development of the audit selection system, which includes audit selection model, and their own characteristics. The third chapter, the author based on the two basic audit selection models, use game theory to analyze the two basic modes of Certified Public Accountants and the accounting reports'favor, then analyze the equilibrium condition of the right of audit selection. Chapterâ…£describes the research hypothesis, further analyze the equilibrium of the parties. The contents of Chapter V is on the basis of Chapter IV to analyze the Audit Committee mode, the Securities Commission model, the financial statements insurance system model, then analyze and comparison of several modes of Certified Public Accountants'conditions of abandon or maintain their independence. Chapterâ…¥is to sum up the chapters.In particular, it summed up the contents and conclusions of the third chapter to chapterâ…¤, pointing out that China's current national conditions which the audit selection model should be used can most effectively improve the CPA's independence. Chapterâ…¢to the fifth chapter is the main part of the entire article.This paper attempts to analyze the current representative audit selection system-the Commission model, the financial statements insurance model. On this basis, to find a mode which acquire a suitable to China's national conditions through game theory analysis and mathematical derivation of an in-depth analysis. Article used the method of economic game theory, incentive theory, and then come to the conditions to maintain or abandon CPA's independence, reveals that there is a law implied that the audit selection belonged to regulators is more effectively improve the CPA's independence, compared to the right belonged to enterprise management.Which external agency control the audit selection right would be more effective? Study concluded that the financial statements insurance system is preferred, but the system is still in the standard theory research stage. Moreover, to ask a profitable financial institution to take on this task, it may appear that at this stage nobody would answer. The SFC can take this responsibility, because it is a listed company's regulator. Therefore, authors believe that the audit selection right should be transferred to the Securities Commission.There are three innovations of this article.. First of all is to study the perspective of innovation; Second is to study the methods of innovation; Finally, study of the content of innovation.