Research On Audit Occupation Judgment Based On The Game Theory

As a kind of external supervision mechanism, audit aims to overcome the information asymmetry between owners and managers and improve the credibility of the financial report and ensure the related benefits. Along with the increasingly perfect economy system in our country market, audit has become a indispensable content of the capital market. The social status of audit institutions are improved constantly, at the same time, the social public’s expectations to audit quality are also increasing."When the21century is coming, fraud and error auditing in the international and domestic capital markets is appearing gradually, and accounting firm (auditors) responsible for auditing is(are) often involved in this becausing of their auditing work without effective monitoring. Currently, audit judgment has encountered inevitable challenges, audit risks what auditors face with continue to increase, and the overall audit judgment quality has showed a bad performance. Though our country’s auditing standards and norms are constantly improved, there also exist significant deficiencies, and lack of effective supervision and punishment mechanism which to some extent exacerbated the occurrence of the audit risk and the decline of audit judgment quality. There are many reasons leading to audit failure, probably due to auditors’violation of professional ethics so they did not report the fraud that they found out even conspired with the audited units, such as AnDaXin accounting firm;Maybe it is because professional competence is limited, although auditors work hard, no fraud can be found;perhaps it is simply because auditors is too busy to finish their job in limited time,and didn’t pay deserved efforts that fraud report was not found.With the rapid development of the economy, accounting, auditing standards and norms has a certain hypothesis and the binding to accounting. In addition, the punishments of social regulatory agencies for violations lack of intensity.This shows audited managers has motives to provide fraud information for individual or collective interests.This tests the auditor’s moral level and professional skills, at the same time, audits and managers’potential friendly cooperation tests audit supervisory organization’s ability and strength, so the game relation among the two will be very worth scholars research.The main writing-line of this article use the theoretical analysis as the basis, combine with the specific circumstances of domestic and foreign scholars’research to analyze the argument, sum up the current problems of the audit professional judgment, and then analysis specific process of game by bringing the incomplete information dynamic game model into this paper, so obtain reasons of those existed problems and produce some thoughts how to improve. Based on the study of the reference scholars, this paper briefly introduced the rationality of bringing the game theory into the audit professional judgment and the wide application of the game theory in economic and management. In past research, there are many Game models, but in this paper I think audit judgment process is a accurately incomplete information dynamic game. There are two reasons:first, Game participants are at different practice, different environment, and grasp different information. When blended into the game, the information of game opponents can not be entirely accurately masted, so the game information is incomplete; second, the action of audit judgment’s participants is sequenced. In the auditors and managers’game, the first was managers choose a certain probability for financial report fraud, and then auditors choose case to decide whether conspiracy or compliance with the case of not knowing managers’behavior. So the audit judgment is a dynamic game. About the research of external audit’s incomplete information dynamic game, there are many previous studies. Because we are the country that pays more attention to the rule of law, and external supervision is almost national authority (Such as the national audit office) or social organization (Such as CPA), I believe that in the legal society the external supervision has more influence on audit of game participants’decision.So this paper respectively set up incomplete information dynamic game model between the auditors and managers, auditors and regulators.According to the analysis of the equilibrium results of game theory, find the shortcomings of the audit judgment in the game environment, game skills and rules of the game.And then puts forward the measures to reduce financial fraud and audit fraud,emphasize the importance of audit external supervision.I hope this can be helpful to solve the existing problem of audit judgment and play a positive role in subsequent research of audit judgment.