analysis of the factors influencing the auditing independence

1、<p>　　Analysis of the factors influencing the auditing independence</p><p>　　Abstract. Whether the CPA industry can maintain the appropriate independence is related not only to the industry itself， but

2、also to the big development environment of the entire national economy. In this paper， based on the existing research results， starting from the definition and evolution of independence， giving full consideration to the

3、factors affecting the independence， and combined with the status quo in China， the suggestions and measures are proposed to maintain the independence of th</p><p>　　Key words： Independence； audit； countermea

4、sure； factors </p><p>　　1. Meaning and developing of the auditing independence </p><p>　　Thomas. G. Higgins， president of the occupation ethics committee of the association of Chartered Certifie

5、d Accountants in the United States， further improved and generalized the concept of independence in 1962. He thinks， "The CPA must have the independence， which in fact has two types， the independence of the essence

6、and the independence in the form". The so-called formal independence means that the certified public accountant must have no special interests with the enterprises or the individua</p><p>　　The CPA exam

7、ination guidance material "The audit" compiled by the Chinese Institute of Certified Public Accountants in 2005 gives the definition of the independence： "The independence refers to the substantial indepen

8、dence and formal independence. The substantial independence means that when the certified public accountant expresses the views， his professional judgment is not affected， and he does justice practice， and maintains obje

9、ctiveness and professional skepticism. The formal independence </p><p>　　Since 1999， China has carried out the reform of CPA firms. All CPA firms are completely decoupled with the government agencies， and be

10、come the enterprise management organizations of independent practice， self financing and self development. Without the government as the backing， and no administrative intervention which is not necessary， the national au

11、dit personnel completely separate from the independent audit. The independent audit goes into the free market competition， and the firms essential</p><p>　　But since then， the legal litigation cases of the i

12、ndependent audit increased sharply， and the independent audit occupation almost came into the litigation explosion. Although the number of Chinese firms is big， they are consistent with the small， scattered， chaotic stat

13、e， and most do not have the capacity to independently undertake larger and super large enterprise auditing. With China's entry into the WTO and the integration of the world economy， the audit field opening to the out

14、side world of</p><p>　　3. The influencing factors of audit independence </p><p>　　3-1. The idea that the administrative power is supreme </p><p>　　Our country has experienced thousa

15、nds of years of feudal autocratic rule， and the emperors had supreme privileges， and the magistrates also centralized powers on major issues， but the subordinate officials and people only had the right of obeying. The id

16、ea that the administrative power is supreme rooted in the minds of the people. Although after the liberation of China we established the system of people's congress， in the management of economic and social affairs o

17、f our country， we are accustom</p><p>　　China is trying to take the CPA business fully to the market just like developed countries， but at present our country has not yet formed a sound audit market. As far

18、as the demand of the audit market， although China's current financing program， IPO and pricing mode have its historical inevitability and rationality， it also results in the lack of high quality audit services of the

19、 market. At present， in the accountant market of our country there are a number of accounting firms of small scale， w</p><p>　　3-3. The principal-agent relationship </p><p>　　Independent audit i

20、s the review activities where the CPA accepts the commission of the property owners and to review the situation of implementation of accountability of the property operators. There is a special relationship between the c

21、lient， the auditee and the audit. But， at present， our corporate governance structure of the company is not perfect， and the property right of many enterprises is not clear. The separation of the shares of the company wi

22、th the right of ownership and management </p><p>　　3-4. The CPA itself </p><p>　　Once the comprehensive ability of the auditing staff is not strong， or lacks the professional experience， then in

23、 the entire audit process， naturally he needs guidance and assistance of the audit staff， thus has difficulty forming the independent audit opinions， which will affect the independence of the audit work. In addition， som

24、e practitioners have no comprehensive understanding about their work， and do not have a strong sense of responsibility and moral consciousness， and now the general soc</p><p>　　4-1. Improve the social enviro

25、nment </p><p>　　4-1-1. Effectively standardize the government demand for legal services </p><p>　　We should deepen the reform of the enterprise， establish the modern enterprise system that "

26、;the property rights are clear， powers and responsibilities are clear， government functions separate from enterprise management， and the management is scientific"， improve the operation and management of state-owned

27、 assets， establish operation and management company of state-owned assets， and solve this kind of problems of state-owned enterprises "vacancy of owners"， in order to reduce the administrative i</p><

28、p>　　4-1-2. Accelerate the construction of market economy </p><p>　　The requirements of the market economy are the rational allocation of resources and efficiency， so the market acceptance is the successfu

29、l enterprises with strength and good management， and the enterprises relying on the relationship to have access to the survival and development of space will become increasingly smaller. So we must speed up the construct

30、ion of the socialist market economy and establish the concept of the market economy， to create a good environment for the audit. The establishm</p><p>　　At present， we should reform government’s supervision

31、and management pattern for the listing corporations， and cancel all forms of administrative examination and approval procedures. Whether the enterprise can appear on the market and the price of the IPO is completely base

32、d on the market demand. The demand of the listing corporation for audit services do not take the policy needs as the first orientation， but the market self as the first guide， and gradually change the situation that our

33、securi</p><p>　　4-3. Balance of auditing relationship </p><p>　　Our country should reform the client system， and stipulate that the audit clients are the general meeting of the shareholders. The

34、 directors and the managers are not allowed to replace the principals. We should also deepen the reform of the management system of state-owned enterprises， to find a reasonable and true person in charge of the state-own

35、ed enterprises and the property representative to take the risks， to strengthen the constraints of the owner on the operators. But in view of the curr</p><p>　　4-4. Strengthen the legal construction of audit

36、ing </p><p>　　As the premise and guarantee of the social "order"， the set， innovation and institutional change of the regulations have a dominant effect on all members of society and the individual

37、s， to regulate their behavior patterns， and affect their values. An important standard to measure the development level of a country’s CPA industry is whether there is a set of suitable and applicable independent auditin

38、g rules and regulations. From the Southeast Asian financial crisis， a country must have a higher </p><p>　　The first is to establish the internal audit personnel occupation ethics， strengthen occupation mora

39、l education and the study of the policies and regulations of the internal audit staff， and improve their moral cultivation and policy levels. The second is to strengthen the continuous education of internal audit staff.

40、In addition to the financial accounting and auditing knowledge， they should also be familiar with the related knowledge of laws， economy， finance， trade， taxation， statistics， infr</p><p>　　5. Conclusion <

41、;/p><p>　　As the guard of the public trust， the accounting profession is steadily developing， and following the economic market of the era of globalization information technology. Audit， this is a private occup

42、ation of public compulsory， and is a very hard occupation but is often a thankless task. What is out of the ordinary is that the auditing profession is privileged， very important and also very fragile. Every day， they ha

43、ve been required to tirelessly survey and judgment sharply. A miss is as good as</p><p>　　6.Acknowledgements </p><p>　　Project： Research on internal control and audit—the incidence relation base

44、d on the financial report audit and the internal control audit </p><p>　　References </p><p>　　[1] Song Xiayun. Study on factors and control mechanism of Chinese national audit independence damag

45、e – based on the preliminary evidence from 246 experts’ investigation [J]， Auditing Research， 2010 （01） </p><p>　　[2] Yang Jinsong， Han Hong. Factor analysis and countermeasure research on the CPA audit inde