Research On Deficiencies,causes And Countermeasures Of Foundation Audit

Since the promulgation of the "Regulations on Administration of Foundations" in2004,Chinese foundations have have entered a new stage of rapid development.Both the scale and the quantity of foundations have increased greatly.Non-profit foundations which promote public welfare have become an pivotal subject in Chinese national governance system.At the same time,the problems of foundations have been constantly exposed,which led to the researches on the audit of foundations.As a social organization,internal audit is an endogenous requirement.Due to the diversity of funding sources and the sensitivity of charitable funds,CPA audit and national audit are both indispensable.In addition,the Charity Law makes it clear that the financial reports of charitable organizations with public fundraising qualifications must be audited in 2016.The development of foundation auditing has gone through a process from single to multiple,which reflects the government’s commitment to charity and its determination to supervise philanthropy.However,under the multiple auditing supervision,the credibility of foundations is still difficult to improve.The complex sources of funds and the ever-rich forms of fundraising make it difficult for the current audit supervision to meet the public supervision needs.This article combines theoretical research with application research,and integrates theories such as the Voluntary Failure Theory,and the Synergy Theory.First,this article defines the research object.Next,it uses the Voluntary Failure Theory to explain the the necessity of foundation’s collaborative auditing.Then,through the analysis of the foundation auditing system,it is found that this system meets the application conditions of the Synergy Theory.On this basis,this article describes the status quo of the foundation’s audit system and finds that the foundation auditing system exists many deficiencies.For example,the national audit and internal audit are both insufficient,the CPA audit has limited function,and the coordination between different audit subsystems is poor.These are mainly due to the backward auditing technology and the lack of supporting laws and auditing resources.This article also takes the audit of the Chinese Red Cross Foundation as an example and finally proposed the establishment of a collaborative auditing framework of foundations.Basing on the characteristics of the frame work,this article designed the organizing structure,information transmission structure and process structure of the collaborative audit.Thus,the collaborative auditing framework of foundations can be systematically constructed.Through the analysis of the foundation’s audit defects and causes,this article hopes to build a collaborative audit framework for foundations so that the overall efficiency and effectiveness of the foundation’s audit system can be greatly improved,the information asymmetry can be reduced and the credibility of foundations can be enhanced.