Esearch On The Evolution Of Independent Auditor’s Report

The generation of independent audit is based on the separation of enterprise ownership and management. Under the two rights separation system of joint-stock company, operators and owners do not match the target. Because of information asymmetry, the operator is likely to deviate from the goal of shareholder value maximization for individual interests. So, the owner hired independent intermediaries to audit operator’s business performance, in order to reduce the adverse effects caused by information asymmetry. Later, with the development of the securities market, the number of individual investors continues to increase, and the scope of the accountability expands. It is no longer limited to the investment institutions and operators. Therefore, passing the audit information with concise language and standard format to the general users is particularly important. Continuously meeting the needs of users has become the direction of the auditing profession.Audit report is the final results of independent audit. The purpose of compiling audit report is to show the professional opinion about whether the financial statements of the audited unit reflects the financial position and operating results, and to limit the auditor’s responsibility at the same time. Therefore, audit report is of vital importance to listed company, creditors, investors and government regulators, as well as to the auditor’s own interests. As a result, audit report deserves high priority.Based on the importance of audit reports, this paper chooses the audit report as the research subject. Mainly according to the time order, this paper tries to comb clear the evolution rule of audit report development, and analyze the reason of its continuous improvement after introducing the development history and the promotion of the reform of audit report. The focus of this article is to carry on a detailed summary analysis of the content of the reform performed by IAASB, and give examples of new audit report after the reform, in order to show a clear explanation. Furthermore, this paper put forwards China’s response to the reform of audit report, and tries to analyze the pros and cons of its generalization in China. As a whole, the reform of audit report is considered positive with some implementation details proposed in this paper.