Problems And Reform Of China’s Audit Legal System Of The Issuance Of Securities

Securities issuance system is a basic system of modern securities market, and oneof the most important threshold of the enterprise to financing, it maintain the order ofthe securities market and protect the interests of the investors and to promote theimportant guarantee for economic development. However, China’s existing securitiesissuance system exist many problems, these questions involved with the sensitive andflimsy nerve of the investor.One of the most prominent issue is the administrative control of the governmentis so excessive. The hand of the government restless, and through its owndevelopment, enacted the administrative regulations、decisions、orders and otherforms to intervent of the securities issuance auditing. The administrative issue sizebrings the predictability change of the market’s supply and demand, and the issuanceof securities is seriously out of the market trajectory. Secondly, the corruptionproblems in the issuance of securities are also very prominent. The department ofissuance of securities holds the power of the issue, and has provided a broad space forits power-rent seeking. The department of the Securities and Futures Commission hasbecome one of the most corrupt departments. Third, in China’s issuance of securities,there are so many illegal behaviors and data falsifications. These existent problemsgreatly reduce the efficiency of securities issue auditing, and effect the quality of theaudit.The reason is mainly the following points: First, from the economic view, thefundamental reason why China’s securities issuance excessive administrativeintervention is that the intervention of the government cost significantly less thantheir incomes. Because of the temptation of the high yield and low cost, hegovernment’s visible hands always restless. Second, Securities and FuturesCommission has great power and little responsibility, detailed supervision is theimportant reason of its regulatory effectiveness, detailed regulation is the major causefor failure of the regulatory. Third, the working system of the issuance examinationcommittee is not reasonable, and the supervision, to the administrative people is notintensity. In the reasonable working system, to ensure audit quality and efficiency isdifficult.Although our country had implemented a series of exploration to reform theSecurities issuance system in recent years, but still had obviously insufficient. So, wemust make some specific and feasible suggestions on the basic of summarizing theproblems and analysising the reasons, and improve the securities issuance system ofChina gradually.