Case Study On The Affecting Factors Of Appointment Of Auditor Of Listed Companies

In order to reduce the degree of information asymmetry between listed companies and investors,the auditor,as an external independent third party,provides assurance services for the information disclosure of listed companies objectively and independently.The arrangement of auditors' appointment is determined by the audit supervision in corporate governance,therefore independent audit is a part of corporate governance."Guidelines on the Implementation Rules of the Board of Audit Committee" of China stipulates that,it is the main responsibility of audit committee to propose to hire or replace external auditors.However,due to the defects of internal governance and the shift of entrustment right of listed companies in China,the actual audit entrustment of listed companies is either exercised by the major shareholders,the board of major shareholders or the managers controlled by the board.As a result,the internal controllers of listed companies have great decision rights in the appointment and payment of accounting firms,and actually manipulates the auditing affairs of enterprises,which has a negative impact on the role of external auditing governance.Therefore,it is a very urgent issue to improve the system arrangement of external auditor appointment in listed companies.It is of dual significance to study the factors of listed companies' governance that influence the selection and appointment of auditors,for upgrading both audit quality and corporate governance level.This paper takes the case of KONDARL Company,who could not hire an audit institution due to the fight for control rights between the two major shareholders,resulting in delayed disclosure of the annual report,which can not help triggering public focus on the effectiveness of its corporate governance.This paper argues that external audit,as an independent third party as well as a protector of shareholders' interests,yet in this case,became a tool and means for major shareholders to fight for control rights,but did not effectively played the role of external governance.Therefore,this paper explores the corporate governance factors that influence the appointment of KONDARL audit.By improving the level of corporate governance,external audit can better play its role in alleviating agency conflicts,reducing agency costs and optimizing resource allocation incorporate governance.Based on the review of the relevant literature and the relevant theories,this paper introduces the general situation and causes of the competition for auditors' selection and appointment right.In the part of case analysis,it mainly analyzes the problems,causes and influences in the delayed process of auditors' selection and appointment of KONDARL in2018 through combing the process.After the analysis,it's been found that the loopholes of external supervision ? the imperfection of the legislative system and the imbalance of KONDARL corporate governance mechanism of the audit recruitment process of listed companies,to some different extent,caused the the delay of auditors' appointment in KONDARL.Finally,this paper proposes several policy suggestions on how to improve the legal environment,external supervision system and internal governance of listed companies to ensure the effectiveness of the auditors' selection and appointment mechanism through optimizing corporate governance mechanism.It's expected to be a reference for effectively ensuring independent audit to play its role of external governance in corporate governance,and for promoting the healthy development of Chinese capital market.