A Normal Study Of Auditors’ Information Disclosure

Because of the low transparency of auditing industry, there exist seriousprincipal-agent problem and asymmetric information problem, which shocked thestock market by means of various audit incidents of failing. In order to protectinvestors’ interests, we need to improve the transparency of auditing industrythrough establishing a normative disclosure system of auditors’ information.The auditors’ information disclosure system of China has its initial shapebecause of some relevant documents of CICPA. However, comparing with thewell-established system of foreign countries, our system still needs to be improved.Moreover, the investigation of our system implementation shows a lot of problems.On the basis of the system comparison and system investigation, this thesis presentsto normalize our auditors’ information disclosure system on three levels: the legallevel, the standard level, and the implementing regulation level.On the legal level, the system’s legal status should be clear, which helps to makeit clear of mandatory disclosure, review and supervision, and legal liability ofauditors’ information disclosure. On the standard level, the system should bespecified, including six aspects: the standard-setting and standard-promulgatingbodies, the nature of information and the bodies and methods of informationdisclosure, the levels of information and the contents of information disclosure, thetime and frequency of information disclosure, the responsibility and authority ofregulatory agency, the policies and procedures of the standard amendment. On theimplementing regulation level, problems arising from the implementation ofstandard should be solved, including two aspects: the specific measures forimplementation, and the solutions to special problems.Last but not the least, no system can work well without a well-establishedsupervisory mechanism, which helps the system to be complied with and to achievethe initial goals when it is established. This thesis discusses how to establish aneffective supervisory mechanism of the auditors’ information disclosure using theshadowless-lamp-effect theory.