The Research On The Governance-oriented Audit Model

The 21st century is the times of the corporate governance. Currently,no matter the academic research on modern company system or the arrange of company correlation work, is aiming at the corporate governance. In post-Enron era, there are more and more attentions to corporate governance and financial frauds, which have brought a great influence on the development of auditing. However, the current audit model has been difficult to meet the need of the comprehensive corporate governance. Thus, we need to reconsider the institutional arrangement and the functionality localization of the audit under the new environment."The corporate governance"that sources from the agency and the contract incompleteness, essentially, is a series of assignments and the agreements of the contracts for the authority, the responsibility and the advantage between all kinds of stakeholders. Moreover, audit contract could be viewed as a special kind of contract that is used to control the others contracts, which were named the foundational contract in this paper. In this sense, the corporate governance and the audit have natural relations based on the thought of contract theory. Thus, the research on the governance-oriented audit model would provide the new prospective and theoretical support for the development of modern auditing.This paper views the realization of the corporate governance as the principle of audit, based on the analysis of the corporate governance and the meaning of accountability, and then advances the governance-oriented audit model. This model would use the idea of governance to guide the modern audit goal set, the audit contract conclusion, the audit department organization and the audit system management, etc.The primary research approach of this paper is as the following: Firstly, according to the analyses of the enterprise multi-dimensional contractual relationship model and the accountability between those foundational contracts, the theoretical framework of the governance-oriented audit model is constructed. Secondly, the new orders of the independent audit contract and the internal audit contract are studied respectively in the governance-oriented audit model. Thirdly, the technical means of the governance-oriented audit model is advanced. Finally, the issue explored is how to integrate the audit resources and improve the efficiency of the cooperation between the independent audit and the internal audit.This dissertation is composed of eight chapters.Chapter one is introduction, in which the background, the major issues for discussion, the document of this research and the structure of this dissertation are contained.Chapter two is about the central theory and the theoretical framework of the study on the governance-oriented audit model. In this chapter, the author explains the enterprise multi-dimensional contractual relationship model and the accountability between those foundational contracts, also compares the other audit model, then advances the governance-oriented audit model and constructs the framework of this study.Chapter three is the study on the new orders of the independent audit contract in the governance-oriented audit model. Firstly, the author reviews the historical evolution of the independent audit contract, then points out the weaknesses and defects of present independent audit contract, on the basis of these issues, establishes the new orders of the independent audit contract. Furthermore, builds the three-parties dynamic game model for the way of the increasing of the independent audit contract efficiency.Chapter four focuses on the relationship between the selection of the independent auditor and corporate governance base on the Chinese market, in order to explain which factors of corporate governance have been considered during the course of the selection of the independent auditor, also how degree these factors influence the selection. The conclusion is that there is a positive association between the selection of the independent auditor and the structure of shareholder, the variable of the director-CEO, the ratio of the independent directors and the variable of the other stock market, also a negative association between the selection of the independent auditor and the leverage which is the variable as proxy for the stakeholder interests of creditors.Chapter five is the study on the new orders of the internal audit contract in the governance-oriented audit model. Firstly, the author reviews the historical evolution of the internal audit contract, then points out the weaknesses and defects of present internal audit contract, based on these analyses, establishes the new orders of the internal audit contract. Furthermore, explores the way of the increasing of the internal audit contract efficiency.Chapter six is concerning the system of the technical means of the governance-oriented audit model. In this new audit model, the first step of the audit procedure is the evaluation of the corporate governance; the next is the analyses of the weaknesses and defects of the corporate governance; the last step is the audit test plan, in which the audit risk estimation, the audit scope determination and the audit resources allocation are contained.Chapter seven investigates the relationship between the corporate governance and the audit opinion, which offer the empirical support of the system of the technical means of the governance-oriented audit model. The results show that there is a positive association between the corporate governance and the audit opinion, that is to say, the better the quality of the corporate governance is, the more possible the corporate get the clean-opinion from the independent auditor.Chapter eight discusses the boundary and the cooperation of the external audit and the internal audit. This chapter, based on the theory of organization contract, analysis the boundary of the internal audit and external audit, and researches how to integrate the audit resources and improve the efficiency of their cooperation. There are several innovations in this dissertation.Firstly, this paper advances the new topic of the governance-oriented audit model, which is the innovative research on the audit model. The transform of the audit model is the change of the way of thinking, and then the theory of the governance-oriented audit model provides the prospective and theoretical support for the development of modern auditing.Secondly, this paper carries on comparatively systematical and deep researches on the governance-oriented audit model, and advances some innovative academic viewpoints as the following: (1) The enterprise multi-dimensional contractual relationship model is constructed, which is the logic starting point of the governance-oriented audit model; (2) The governance-oriented audit model is advanced and the theoretical framework of research is constructed; (3) The new orders of the independent audit contract and the internal audit contract are studied respectively in the governance-oriented audit model; (4) the system of the technical means of the governance-oriented audit model is set up; (5) the methods of archival research is applied in the relationship between the selection of the independent auditor and corporate governance, also the relationship between the corporate governance and the audit opinion, with the data from the Chinese capital market; (6) The boundary and the cooperation of the external audit and the internal audit are discussed systematically.Thirdly, the author studies the governance-oriented audit model in comprehensive use of normal research and positive research. The normal research methods of this paper include logic deduction, induction, comparison analysis and model set, and the theory of contract economics, the game theory, the probability theory are applied in study; meanwhile the positive research methods of this paper is mainly archival research with the data from Chinese capital market.