| Just as capital market is regarded as the core of modern economy, investment bank is the core of the highly matured modern capital market. It participates in the resource allocation of capital market in variant forms and becomes the close tie of the capital surplus and the capital lack. Investment bank referred to the institution that engage in businesses such as securities underwriting, capital raising, merging and acquisition, counseling, fund managing, etc. All these businesses are called investment bank business. For some historical reasons, the name of investment bank varies from country to country. It's called investment bank in USA, and securities companies in Japanese, merchant bank in UK, etc. No matter what it is called, The leading role of investment bank in modern capital market is unshakable.Investment bank is a newcomer in our country. It grows with the development of the securities market. As most investment bank business is carried out by securities companies and separated from banking business, trust business and insurance business, the author uses investment bank as a pronoun of securities companies. The security market in China is only about 20 years old, however, it has played a significant role in the state-owned enterprises' financing, enterprise mechanism transiting, resources allocation optimizing, price discovering, etc. Investment bank, the core of securities market, has made irreplaceable contributions. It acts as mediators such as financial advisor in the transition of enterprise mechanism, underwriter in the issuing of securities and advisor in enterprise merging and acquisition. According to statistics, there are thousands of institutions that engage in investment bank business. Among them, there are 96 securities company, 245 trust investment companies and more than 2000 securities exchanges, which shows that investment bank has gained great development in China. But we must keep a cool mind that many problems have popped up along with the development and accumulated to be big risks. They jeopardize the healthy development and the prosperity of our securities market.The securities market is an important benchmark to measure the maturity of market economy. The stability of the market economy operations is influenced by that of securities market since the public capital in the form of securities share appeared on the market. However, the risks of the securities market often touch off financial crisis even the economic crisis, such as, the Great Depression in 1930s, and British Barring Investment Bank's bankruptcy, Japanese DaiWa Bank's huge losses, Hong Kong Baifuqing bank's bankruptcy and Guangdong international trust & investment bank's liquidation in last year. All these events had caused turbulence in the international financial market and given cautions to us. If we don't strengthen the prevention against investment bank risks, our securities market, which is still in its early stage, will tremendously once any bankruptcy of an investment bank occurs. There are about 40 million investors in the securities market and the total capital in circulation exceeds 1000 billion RMB up to now. Securities market risks may bring on social crisis. It's not exaggeration. It is highly necessary to make effective prevention against the investment bank risks to secure the healthy development of securities market in China. That is also the main motivation of the author to choose "Audit and investment bank risk prevention " as the topic to research.Another reason to choose the topic is the possibility of using audit to prevent these risks. From the theory of accountability, the investment bank risks are the result of departures or errors in the process of fulfilling the accountability. Different departures may cause different risks. If the departures cannot be timely found and corrected, quantitative change will gradually turn into qualitative change which may lead to investment bank risks. The essence of audit lies in "the activity of economic supervision, appraisal and attestat... |
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