The Research On How To Ensure The Independence Based On Entrustment Pattern Of Listed Corporation

From abroad, a series of financial fraud cases such as Enron, WorldCom, AOL, Lucent, Merck,Global Communications, and other world-renowned companies, to domestic, such as Joan MinYuan, Dawn, Yin Guang Xia and other major financial scandals are not uncommon. It is thus clearthat the audit services of certified public accountants don’t play due supervisory responsibilities.Given occurrence of so many cases of audit failure, we can’t only attribute to the professionaltechnical capabilities and moral standards of Certified Public Accountants who provide auditservices, but should seek problems from deeper level of institutional arrangement of audit businessin order to seek a breakthrough. The audit entrustment pattern is the start point of the institutionalarrangement, so different audit entrustment patterns will lead to different audit entrustmentrelationships, and then affect the independence of Certified Public Accountants and the quality ofaudit businesses. Therefore, I think how to reform and improve the audit entrustment pattern hasbecome a urgent problem to be solved. Although many scholars at home and abroad have putforward their own views and opinions, they don’t reach an agreement. Therefore, this article iscommitted to put forward a set of institutional arrangement about how to reform the auditentrustment pattern on the basis of absorption of the existing literature essence, in order to adapt tothe conditions of our country.In this paper, I discuss the thesis from the following several aspects. The first part is theintroduction, mainly including the article’s background and significance and the present researchsituation; The second part is the basic theory, mainly elaborating the related basic theories of theaudit entrustment pattern and the independence of Certified Public Accountants; The third part isthe analysis of the problems and their causes of the audit entrustment pattern in our listedcompanies, mainly from the angles of imperfection of the governance structure of listed companies,unscientific determination and payment of the audit fees and the imperfection of supervisory system;The forth part describes the enlightenment from the practices of audit entrustment pattern abroadand domestic Kelon Electrical case; The fifth part is the realistic choice of the audit entrustmentpattern for our listed companies. In view of problems raised in the third part, I recommend toestablish the audit entrustment pattern of separation of selection and employment guided by theassociation of Certified Public Accountants, and tease out corresponding workflow and supporting conditions; The sixth part is the conclusions and prospect. It is the generalization andsummarization of the full text and the disadvantages existing in the writing process.The value of this paper is that I search the problem from the institutional arrangement and putup with the corresponding countermeasure. By analyzing the effect of audit entrustment pattern onindependence, I raise the problems of existing audit entrustment pattern and draw lessons fromforeign practice. Finally, I conclude that the audit entrustment pattern of separation of selection andemployment is our realistic choice.