Study On The Legal Problems Of Assets Replacement Audit

Assets replacement is a way of the assets reorganization.It has been a trend that companies are choosing this way in order to solve problems. But, assets replacement is not the effective and essential way to solve these problems. In order to avoid resource flow and unnecessary social cost, we must pay attention to the legal matter in examining assets replacement. The cause of assets replacement usually happens in company with optimizing assets structure, strip bad assets off, pulling good assets in to strengthen the ensemble competitive power. While in fact,assets replacement triggers series of related transactions. These problems will be solved if we administer the whole procedure strictly.Assets replacement is an important strategic decision to the company. At the same time, it is a specific kind of invest behavior to the market. It has the basic feature of investment, while it is different from general investment.The audit subject includes CSRC, accounting firms, law office, the independent director, assets evaluation institution and CSRC. These audit institution are responsible for the audit results.Assets replacement audit content should include the assets of the company, the operating condition, the maintaining independence of the company, the achievement to the expected benefits, the influence to the market competition, and the impact on the environment.These things should be mentioned when submitting application. But in contrast with European convention, we have deficiency in expected benefits, influences on other enterprises, national security, staff arrangement. There are three problems in concluding. First, the coverage of the audit contents is not comprehensive. Secondly, the mode is too simple by formalizing examine. Third, regulations cannot operate well in reality. The audit procedures should be based on the multielement but centralized subject. The term should be clear and definite and the supervision afterwards should be emphasized.During assets replacement, different institutions estimate and appraise the company’s assets, the accounts, the profit ability, they work out objections and are responsible for it. The main responsibility of auditor contains the duty of confidentiality, the diligent duty to report the truth. After the company submit to CSRC for assets replacement. CSRC has the responsibility for positive action, continuous supervision, confidentiality and send crime to the police office. After the replacement of assets, audit institutions still have the responsibility to supervise the staff arrangements, the ability to make profits and the influence on the market competitiveness. But if the company deliberately false materials to cheat, or encounter the irresistible force, it’s duty will be relief.