The Research On The Basic Theories And Practical Problems Of Independent Audit Regulation

The role of CPA becomes more and more important in the developing process of market economy, especially in securities business. The frequent emergences of financial skullduggery of listed company indicate that the auditing service of CPA is of low quality. In fact, low quality of CPA's is just phenomenon; essence is the limitation that lies in the profession of independent audit. How to improve on the mode based on reality and basic logic of regulation have valuable theoretical and practical meanings that can guarantee healthy development of the profession.We start with the basic theory of independent audit. Firstly, we define the premise, target and basic contents of independent audit. The reasons under mentioned indicate market failure is the necessary premise why independent audit needs regulation: public goods and externalities of audit information, information incomplete and asymmetric. The target of regulation is the important content that controls the theories system. Only right target can assurance the usefulness of practice. We think that the target of regulation should be assurance of audit market independently. The basic contents of regulation of independent audit include: the qualifications of go into, the rules that control behavior, supervisee and punishment, adjustment of audit fees.We introduce the typical countries of the three regulation modes in the profession of CPA: mode of the profession self-discipline, mode of the government regulation and mode of independent regulation. It also analyzes the traits, advantages and disadvantages of these three modes respectively. Furthermore we get some beneficial apocalypses by use of institutional economics.Regulation of our new country's independent audit experienced three stages. The one was the complete government regulation stage before registered accountant's association was founded in 1988. The second was quasi-government regulation stage from 1988 to 2002. The third has been the regulation stage which government predominates since 2002.There is several problems exist in the present regulation system as follows. Too many departments of government are now regulating CPA trade. The status of the Institute of CPA has not been definite. Much measure of government regulation is not appropriate. The results of government regulation aren't effective. In order to solve the problems above-mentioned, the article puts forward a suggestion that we should select different mode of independent audit in the different period. At present, we should improve on the regulation stage which government predominates. When related conditions mature, we can set up mode of independent supervision. In order to improve on present regulation stage which government predominates, we put forward three concrete suggestions. First, legal power of government and the profession self-discipline organization should be divided definitely. Second, we should fully utilize the self-regulation function of the Institute of CPA. Third, we should build up the coordination mechanism of each section of government.