Derivative Financial Instruments Standards Comparative Study

In the 1970s, DFI developed in the parlous state of financial relations, which is considered as a vital tool to avoid risks, with the breakdown of the Bretton Woods System, the suddenly-erupted worldwide oil crisis, and the violently fluctuated interest rates and exchange rate. At the beginning of the 21st century, the subprime crisis is triggered by credit-derivatives and various bonds which are put for a loan. Presence of DFI is to respond to crisis, but it brings the crisis. The auditing of DFI has become a hot topic of all fields of society, while global financial crisis was taking a toll on many countries about the use of DFI.This paper made research on auditing of DFI. This paper collected a lot of latest revision of accounting standards and auditing standards, which was made by foreign and domestic countries after financial crisis. It made a study on the dilution of use and accounting standards by using comparative analytic approach so that the system of auditing standards of our country would be completed, and the auditing ability of DFI would be strengthened. And so it would not provide a well supervision for the development of DFI, but it would promote the healthy development of financial market.Firstly, this paper described the studying present of DFI between foreign and domestic countries, and analyzed the old studying results, current research direction and the short in the studying field. Foreign research data showed that the FASB is responsible for establishing the accounting standards of derivative financial instruments. Therefore, the studying of experts and scholars abroad would focus on the problems existing in the practice of derivative financial instruments and practical operation. At present, China's research of derivative financial instruments gradually involved external environment of derivative financial instruments, that was the system of supervision and auditing methods of research. The research on risk control and audit supervision was not enough, they can make full use of results of other countries and develop a broader space to derivative financial instruments in our country.Secondly, this paper described the basis of auditing of DFI, including use, accounting standards and auditing standards, and the audit itself of DFI. After providing the accounting standards and auditing standards issued by IASB,FASB and China's finance ministry, it made a comparison among them in detail. This paper made a historical comparison on the revision of standards at the boundary point of financial crisis. This paper provided the future direction of derivative financial instruments in China from the needs of development, the kinds of development, the way of development; and provided that accounting standards was bad in the hedging accounting, and what would be taking enough in derivative financial instruments accounting standards in our country; we should pay attention to the awareness of risk, special skills and knowledge and key considerations on auditing of derivative financial instruments, what should be concerned about revision of the standards.Lastly, this paper mentioned some suggestions and measures to promote the development of auditing of DFI by summing up the situation related field of DFI, while analyzing the way for the improvement and revision of standards of DFI after financial crisis. This paper put forward to methods to the necessity of strengthening the auditing of derivative financial instruments from the requirements of the development of derivative financial instruments, and the revision of accounting standards and auditing standards. This paper specifically put forward methods or suggestions of perfecting the auditing of derivative finance instruments in our country. They could improve the overall effection of China's auditing of derivative finance instruments by enhancing the sense of perfecting the auditing standards of derivative finance instrurments, connecting the problems in financial crisis, and amending the auditing standards, and through improving auditing professional knowledge and practical ability, strengthen supervision of credit rating agencies.