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Research on the Re-Position of Relationship between Accountant Firms and Listed Companies
Author: XuQingTao
Tutor: ZhangSuTong
School: China University of Political Science
Course: Economic Law
Keywords: Accountant firms CPA Listed companies Trust
CLC: D922.291.91
Type: Master's thesis
Year: 2010
Downloads: 149
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Abstract
Listed companies are playing an important role in the economics of our country with the development of capital markets, accountant firm’s“accountability”has already evolved from the contributors to the public. Accordingly, the laws for acountant firms and certified public accountants (CPA) have set strictly social public duties and responsibilities. On the contrary, the model of undertaking the auditing of listed companies has been more commerce-oriented, choosen and entrusted indirectly by listed companies management when auditing their own operations activities. One negactive consequence of the model is that accountant firms are vulnerable to be captured by listed companies,then hard to become the public’s“watchdog”. For the elimination of the drawbacks of the model, some researchers have made a variety of improvement programs, but they are not all effective. Because even they realize that interests of the listed companies continue to expand, and have realized the importance of public welfare in the career of CPA, under the way of the principal-agent relationship of traditional theory,they cannot fundamentally solved the problem of association and conflict in the interests between auditors and auditees.To thoroughly solve the problem of“purchase of audit”by listed companies, we must reconstruct the relationship among listed companies, accountant firms and the public:Firstly we must clearly realize the source of obligation and the goal of auditing under the theory of trust,then through considering the mode of principal-agent,finding rational institutional arrangements, eliminating the embarrassment of keeping dignity by beggar.QThere are four major parts in this dissertation:The first part analyzes the evolution of auditing position of CPA, discusses the evoltion and position of auditing and CPA.and has empirically analysised regulation and response of the law as to CPA.The second part takes an insight into the model of accountant firms undertaking auditing business of the listed companies. Independence has become the basic requirements as to CPA in every country,but the business and income of accountant firms come from its customers, which force the accountant firms to meet the customers needs.This awkward position can not lead CPA to straighten their life.And take emphasis on the social obligation, but the model of the relationship between institutions of CPA—accountant firms and their "well fed"—the principal does not follow up, Instead ,it is still under the old theory of principal-agent.In this mode, it is certainly not conducive to the protection of other stakeholders. For this as a line, has specificly analyzied the shortcomings and contradictory of indirect model.The third part poinst out that trust is the new method of constructing the relationships among listed companies, CPA and the public.talking about the origin, essence and the structure of law.The fourth part mainly discusses the position of listed companies, accountant firms and the public under the theory of trust.which not only can explain the source of CPA’s duty, but also give us new ideas to deal with failure of the market because of the failure of state intervention and weakness of individual. points out: duty of trustee - Apart from the obligations of its clients, the main duty is taking their social responsibility regulated by law.To Improve the quality of CPA auditing, in addition to morality, "good" system in which the CPA serves for the purpose of the trust - social interests is of importance.
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CLC: > Political, legal > Legal > Chinese law > Economic Law > Corporate law, company law
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