Research In The "Immune" Function And Mechanism Of Modern Financial Auditing

Financial auditing gains especial attention during this global financial crisis. With theory of auditing "immune system" initially put government audit as the macro-economic regulator to security, financial audit becomes an important supervisor in financial sector with its definitely primary responsibility as to secure financial system whole safe and efficient under reasonable risk level within controlling range.Modern study on auditing function divides it into material part and concrete part,which this paper define as the modern concept of audit function.Material part is the essential duty of audit as to control on the entrusted social and economic responsibility of government. Concrete function develops as the entrusted responsibility of government changes. The concrete function expands both horizontally and vertically, following the logic developing way charted in paper. The "immune" function of financial audit is just result of the development. And it plays such five "immune" roles as resistance, surveillance, early warning, removal and repairing through risk-monitoring activities.One contribution of this paper is to define the opportunity of forming cooperated-supervising relationship between financial audit and financial regulating department.The two respectively play different roles in supervision. Auditor stands from outside of the financial system and could give an overall assessment of the whole system and therefore can give an early warning of potential threatens existing in financial system, while regulating department from inside and controls if these systems conformed to by financial organizations and other participants.Based on this co-relationship, this paper designed the information-transmit mechanism of "immunity" function which collects and transform more visible risk signals micro-level to more potential threat macro-level and drawbacks existing in systems.thereby early warning and "immune" financial system from extraordinary risks and crises.This system is featured and distinguished by two new functions, the special committee of risk regulation and the financial auditing "co-power" system which integrate government-audit, CPA and internal audit to form more "powerful" financial auditing function in supervising. The integrated auditing system is the body function part in information collecting, analyzing and transforming the first step. SCRR leads all co-partners with charge of assessing and transforming next step the information from auditing and other regulators to behinds and outs in present system designs, then expose them and work out proposals to improve.