The Analysis Of Audit Independence During The Period Of Republic Of China

With the development of society, the independence of audit is developing.Independence is the soul of audit, audit is an independent economic supervision activity.To make audit conclusion neutral and fair, you must insist on independence. Chinaappeared the modern auditing thought and theories under the influence of west duringthe period of Republic of China, the audit in academia also attached great important tothe independence of audit. In this period, audit activities were very frequent and auditindependence also appeared especially important. But now, it is lack of monographs andarticles introducing about audit independence, although there are some books discussingaudit independence, it is lack of deep analysis. Therefore, the author tries to conduct acomprehensive analysis of audit independence in the Republic of China on the basis ofpredecessors’ research.Audit in academia realized the audit substantive characteristics in the Republic ofChina. Most people agree that the audit must be performed by the third people, thusmaintaining the independence of audit, placing audit practitioners in a disinterestedposition, ensuring the fair conclusion. In this period, some audit scholars realized thataudit arose from entrusted economic responsibility system, and they paid attention toanalyzing the relation about auditors, client, being audited client. At the same time,some scholars divided audit into internal audit and external audit, and noticed that theindependence of internal audit is not as good as external audit, which captures theessential differences between internal audit and external audit. Therefore, we can seethat government in the Republic of China attached great importance to the independenceof audit.In terms of audit institutions, Beijing government period audit institutions changedthe status that there was no independence audit institution in the ancient, it was thebeginning of the modern professional audit institution. Audit court directly affiliated tothe president, status, independence and authority was strengthened. In the nationalgovernment period, the ministry of audit affiliated to the supervision court, forming theinstitution of integration of supervision and audit, making audit rights can get effectivecooperate with supervisory power, increasing the effectiveness of audit right, thus,protecting the independence of audit. This was the combination between supervisionsystem in the history of china and independence of western audit system.In terms of audit personnel system, in order to safeguard the independence and impartiality of auditors, some scholars claimed that the contents of accountantprofessional ethics should be written into the legislation, which mainly content rulesabout protecting audit independence and impartiality, maintaining the purity of auditteam, and that audit shouldn’t seek improper interests by their professional particularity.In terms of audit meeting, announcement system, in order to protect impartiality ofaudit conclusion, enhance the public transparency of audit activities, Beijinggovernment take audit meeting system, and require that audit results and audit activityshould be published in the government bulletin. As time goes on, audit meeting,announcement system are constantly enrich. The national government establish meeting,announcement system. It is undoubtedly helpful for ensuring independence of audit.In the Republic of China, audit was written in the constitution, which its purpose isimproving the audit positing in the national economic supervision, putting audit in theorbit of the law, ensuring audit independence. In this period, audit legislation reflectedthe thought of integration of supervision and audit on the institution setting, divided onmatters, coordination on performing power, coordinating relations between audit andsupervision. At the same time, audit legislation made comprehensive detailed rulesabout auditors in order to ensure independence. Audit legislation also made rules thatimportant audit must be published in the government bulletin, which improving thetransparency of audit work, accepting the supervision of the general public. Therefore,the audit legislation in the Republic of China was the guarantee of dependence, ensuringthe smooth progress of audit work.This paper is based on the view of history, by collecting and sorting historical data,combining different subjects’ research, making conclusions about independence of audit,which providing some historical lessons and enlightenments, namely: practiceintegration of supervision and audit system, improve audit institution status; establishaudit vertical leadership system; improve audit legislation system; improve auditannouncement system; emphasis on the historical tradition, advancing with times.