With the domestic and international cases of the continuous disclosure of financial scandals, the independent audit process and results of the quality problems are also more and more attention from all sectors of society, thus affecting the CPA an important factor in the survival and development. Therefore, many factors affect the quality of audits to be systematic analysis, and actively explore effective ways to improve audit quality and measures of China's CPA Industry is currently facing a major issue.
Audit quality is the soul of the audit profession, it relates to the vital interests of the public, but also related to the steady socio-Economic development, but also is a certified public accountant auditing profession a decisive factor in the survival and development. The level of audit quality affects their effectiveness of the protection of investors, thereby affecting the public investor confidence and a country's capital market Development maturity. How to effectively improve the quality of independent audit has always been a government regulatory bodies, the legislature and public investors and other stakeholders, the focus of attention. To improve audit quality, a premise that need to be clearly the main factor affecting the quality of audits which. In response, many domestic and foreign scholars have conducted studies that normative point of view or a general theoretical analysis or empirical test from the point of view. Study abroad, mainly empirical studies, and Research results show that the main factors affecting the quality of audits focused on the firm size, audit fees, audit hours and governance Structure of listed companies, etc.; domestic research mainly from two aspects of internal and external causes Study of factors affecting audit quality.
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Through access to a variety of information, I believe that the impact of audit quality factors can be divided into institutional factors, non-compliance factors and technical factors.
First, institutional factors
1. Client integrity. Generally speaking, the integrity of the customer, it provides Information on the financial statements of the credibility of a relatively high, CPA's audit practice can be effective in reducing the risk to the community will be acceptable to the social expectations. On the contrary, devious customers, its financial statements there is an error or fraud more likely. Whether the client integrity, whether deliberately hidden a huge black hole, CPA only after long-term cooperation and regular knowledge, can be distinguished. Thus, both the old and new clients, CPA is often a variety of channels through a comprehensive understanding of client's situation, such as contact former audit staff, and access to previous annual audit working papers, evidence on the client's legal counsel, the depositary bank, the main customers, and so on .
2. Auditor liability. Appropriate auditor liability can promote the community's best level of Investment in the amount of audit quality or auditor effort level, but if the right auditors for providing the measurement of the damage caused by improper verification of judicial inappropriate institutional arrangements, then the auditor's legal bound by the duty would lead to the excessive requirements of more than socially optimal investment behavior. Because if the auditor's legal responsibilities too heavy, the practice of auditors would be too conservative, although the audit report issued by the high quality, but will be less than optimal level required by the community, then it will lead to the actual investment was less than the best investment requirements. Conversely, if the auditor's legal liability too light, auditors would be radical is not a reliable guarantee for the issue of audit quality based on audit reports, so that the community needs more than an optimal level, which induced the community as a whole over-investment behavior.
3. Governance structures and internal control systems. International Standards on Auditing and professional concerns about the management of fraud and so fully reflects the corporate governance structure of the audit quality. First, the separation of ownership and control over the extent and resolution mechanism. Focus on shareholder equity, then there exists alone or in collusion risk of predatory interests of minority shareholders, the management of dispersed ownership, then there exists moral hazard. Embodied in the risk of material misstatement, equity focus easily lead to non-fair related-party transactions, such as the hollowing out, and in order to protect the interests of Shell Resources transport, etc.; dispersed ownership is easily controlled by management for personal gain. Company's shareholders, boards of directors and management incentive and restrictive rules to deal with pre-existing risk of a direct impact on the effectiveness of risk of material misstatement. Second, the management's integrity and attitude in the face of risk. Determine the integrity of the management company due to fraud resulting from the possibility of material misstatement of the financial report. If you face the risk management adopted a more aggressive attitude, then the companies will tend to adopt aggressive accounting policies and financial reporting policies. The third is a system aimed at preventing fraud. Fraud prevention system in the two dimensions of the impact financial reporting, corporate governance level, the system for senior managers on the decision of the company's overall risk of material misstatement (such as silver Guangsha, Enron), for enterprises in high-risk (business risk or assets encroachment the risk of loss or asset) business system to prevent any major losses (such as Barings Bank, Singapore, China Aviation Oil, the French Societe Generale Bank of events).
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Second, non-compliance factors
1.CPA professional care and professionalism. CPA professional care is defined as the process of certified public accountants in practice must be careful, its purpose is none other than the economy from the customer the complicated business and other pre-trial matters have been found in a variety of clues, find the audit trail, especially the customer the wrong place disadvantages clues. Sufficient and reasonable professional care, on the one hand can help as much as possible to find a variety of CPA audit trail and audit a breakthrough, but this can help identify the customers usually appears CPA errors and fraud, while for the unusual items and are not familiar with the situation to respond positively to to take special precautions to understand the latest developments in areas of expertise, learn new theories, techniques and methods to deal with some new problems.
2. The quality of risk awareness auditors weak. In recent years, with the continuous development of the field of auditing, audit coverage is growing, more and more audit project to complete audit assignments under increasing pressure. Due to fewer personnel and heavy tasks, some of the audit staff, including some of the leading audit institutions 'tasks for the completion of the audit' of the deal and rather prominent, and a weak awareness of audit risk, quality awareness is not high, to a certain extent, ignored the audit quality requirements, expressed as : heavy tasks, light audit quality, resulting in the implementation of audit projects and more to create the audit fine little affected the quality of auditing. At the same time, the audit department to authenticity, based on their family property to find out the problem is not solved properly, resulting audit and supervision are dead, leaving behind a hidden risks. Reposted elsewhere in the paper for free download
Third, technical factors
1. Expertise. Audit the quality of personnel is not high, can not meet the work requirements. Auditor knowledge structure from the point of view, the existing staff to understand the general financial audit of the multi-master modern management knowledge, scientific and technological knowledge has a certain ability of a comprehensive analysis of relatively few compound talents, the knowledge structure is relatively old and relatively simple, the overall response to complex audit situations, is relatively weak. Second, the audit staff is relatively weak sense of exploration and innovation, macro sense and not strong enough sense of modern audit. Including some audit institutions of the leadership, at work, thinking on some of the inertia is still relatively strong, the audit work, 'to meet the status quo is a balanced, inert, but they try too' ideas are still quite prominent. Some more traditional financial audit of the concept of concentration that the audit is to guard the purpose of auditing accounts is punishment; some way of thinking a single, more accustomed to thinking of a simple accounting, multi-level, multi-angle perspective to the problem is not enough, a comprehensive analysis of relatively poor ability .
2.CPA practicing experience. If the audit team members have extensive practice experience, we can collect a certain amount of audit evidence at the same time, determine whether there customers take advantage of these accounting adjustments, to freely adjust the accounting profit, so as to achieve its aim of those who did not sue; and CPA practice in the The lack of audit staff often make wood for the trees, but only the surface There is no concrete, on the one hand would waste a lot of audit costs, on the other hand easy to form the wrong audit opinion. It is noteworthy that, no matter how rich Experience practicing CPA, he is not a substitute for proper audit procedures, it can not be ignored due professional care. Otherwise, once the lead to legal disputes, accounting firms, it is difficult to safeguard their legitimate rights and interests.
3.CPA professional judgments. CPA's professional judgment, is a registered accountant in the course of their practice based on their professional knowledge and experience, to be pre-trial matters and acts as a CPA's own analysis, estimates, decide or choose. CPA professional judgments throughout the audit process. Wise professional judgment, you can ensure that the quality of audits under the premise of the audit to save time, reduce audit costs, but the wrong professional judgments, ranging from so compromised audit quality, heavy is usually lead to audit failure. Once the audit caused by failure of the CPA and the firm will be incalculable loss. Therefore, to continuously improve their professional quality, and enhance the work of responsibility, good practice induction and summing up the experience, and continuously upgrade their professional ability to judge, is a certified public accountant to ensure that audit quality, reduce audit risk, the only way to avoid audit responsibilities.
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