Weak position on the settlement of the issue accounting firm Exploratory Research

[Paper Keywords] accounting firm securities regulatory system vulnerable position
[Abstract] Information disclosure of listed companies there are many problems with the weak position at the accounting firm is closely related. Certified Public Accountants, "not independent" is a systemic problem, there are internal reasons, but also So the question externally. To reform the securities regulatory system, the implementation of the way the Ministry of Finance appointed or will appoint accounting firm the power to regulate listed companies under local securities regulatory bureaus.

securities market, as the financing side of the listed company directly determines the kinds of Information to judge its value investors. Listed Company's ability to timely, comprehensive, true and accurate disclosure of Information to the market, intermediary organizations can fulfill their duties, from their the angle of professional and responsibilities, supervise Information disclosure of listed companies to comply with the rules strictly, not only to investors to business, market and the confidence of regulators, but also determines the flow of capital markets and flows related to the efficiency of securities markets is related to market can long-term, stable development.

First, Information disclosure of listed companies in the problems
Regulatory information disclosure of listed companies can not say that the various rules and regulations not exhaustive, has developed dozens of disclosure documents, and be amended, involving from the issuance, offering, trading, acquisitions, related party transactions, withdraw from the market, convertible bond issuance and merger by absorption, the use of funds, internal control, and specific listed companies such as securities companies, joint ventures and other content information disclosure, and in time will include annual reports, semi-annual, quarterly, etc., do careful, however, the information disclosure practice there are still many contradictions and problems, greatly affect the market regulation and development.

Table 1 shows, from January 2003 to June 2005 l0, Shanghai Stock Exchange and Shenzhen Stock Exchange listed companies publicly condemned the 97 cases, was condemned 131 times the total violations. Does not disclose material Information is a listed company engaged in the illegal activities of important ways. not to disclose material information, the listed companies more easily evade the system of internal control and external oversight system monitoring and control. In addition, a significant part to conceal the true information of listed companies, it is also made up false information .


Second, information disclosure of listed companies disclosed false or omitted, no disclosure and other issues in the vulnerable position of Certified Public Accountants
In order to ensure that the assessment of investment projects and the fairness of the stock market, scientific and authenticity, in order to protect the vital interests of the investors, 10 April 1998, the Ministry of Finance requested the implementation of the securities and futures business in 1998, accounting firms must l2 31 months in personnel, finance, the name of three aspects, according to regulations and the affiliated units to implement completely decoupled. restructured into an autonomous practice of Certified Public Accountants, autonomous, self-risk, self-financing social intermediary organizations. Although the form of two who is the service and the service relationship, but in fact they were between the monitoring and supervision with the real relationship. Through this restructuring will allow certified public accountants in the company after the listing of the audit market and play a substantial role in regulation, but the actual situation is that the listed companies which accounting firm with what is decided by the listed company itself. Therefore, as a form of an independent personality and interests of independent accounting body CPA firms, for their own interests, in the assessment of the audit of listed companies is in a weak position, there is no real independent personality.

<<Securities Act "> ����ʮһ�� require listed companies should be the end of each fiscal year, within 4 months from the date of submission of annual reports, and supervision of the accounting firm as a real power has the ability to report timely information disclosure of listed companies. However, according to January 2003 to June 2005 in Shanghai and Shenzhen Stock Exchange listed company publicly condemned the case of statistics, information disclosure is not timely report the proportion of cases accounted for 17% of the total number of violation cases, which reflect the accounting firm in the information disclosure subject to the listed company. According to statistics, from 1999 to 2004, the Audit Commission inspection has organized a securities license Furniture 134 accounting firms, found that some accounting firms and certified public accountants audit report issued by the existence of material misstatements or significant omissions, involving an amount of 36.9 billion, and the more serious of which 88 of the firm, the transfer of 262 CPA Ministry of Finance, Securities and Futures Commission for investigation.

In addition to its other listed companies, some local governments also need false audit reports. Means to alleviate the financial burden on listed companies, which means the local loop to a large amount of debt service funds do not have to mean that the leaders of the political achievements, or even means that the unknown tell Road direct personal interest. and the actual control of the company again in the hands of local government officials, then, as long as listed expense fraud, false accounting firms is not surprising.

Can be seen under the current system, substantial regulatory capacity as a public accounting firm is not possible to play its regulatory role. Together with the Ministry of Finance and the Securities and Futures Commission and other departments on the supervision and management of accounting firms and mainly concentrated in the ex ante eligibility and post-processing of audit and non-compliance, therefore, makes a lot of accounting firms and certified public accountants desperate for their own interests, collusion with the listed company, disclosed to the community is false information. In short, the audit of listed companies with qualified accounting firm, in the actual service and supervision of the weak position in a dilemma.

Third, the accounting firm to resolve the status of a number of recommendations vulnerable
Through the above analysis, in order to solve the false listing, such as chronic false information disclosure, listed companies should address the accounting firms with audit qualifications vulnerable position. I believe that the current securities regulatory system reform, the implementation of the system of the Ministry of Finance appointed way to implement external regulation of listed companies may well be effective.

SFC and the Ministry of Finance to strengthen communication and coordination, not long to go back to before 1998 monitoring system (at the time of the national securities markets as a unified national macro-management of the competent authorities of the State Council Securities Commission, including the units are: the People's Bank of China , the State Restructuring Commission and the State Planning Commission, Ministry of Finance, Economic and Trade Commission, Jian Chabu other l4 home, these units were centralized management of the securities market. This is actually a functional system structure, its main feature is long leadership policies from different departments), but out of control as a substantive capacity in the accounting firm of inadequate supervision in the securities regulatory considerations. earlier analysis that accounting firms in the supervision of a dilemma. In order to be Certified Public Accountants to achieve the purpose of substantive regulation, I suggest the attitude of the Ministry of Finance as an independent listed company with a qualified accounting firm to audit the substantive management, including accounting firms for which a public company (including the provinces of the listed company), when audit, several times, when released after the audit report and so on. Figure 1 shows, the accounting firm responsible directly to the Ministry of Finance, the Ministry of Finance and the Commission for coordination between the regulatory front. Only in this way, accounting firms it has an independent personality, can play its role in the substantive regulation. Of course, this time the relationship between accounting firms and the Ministry of Finance is not the administrative affiliation, and its purpose is to achieve an independent regulatory functions of listed companies, so Figure 2 using dotted lines connecting the Ministry of Finance and Auditor.

Links to Research Papers Download http://www.hi138.com, of course, supervision of accounting firm to resolve the dilemma of the measures are not only one. I believe that the management of the capital market involves comparing J, the task is arduous, government regulation, Administration may be powerless, and because China is a three-tier system of securities regulation, sometimes beyond the reach of the regulation, regulatory costs are higher, so the lag is bound to lead to regulatory supervision thus reducing efficiency. In order to play with qualified accountants to audit public companies affairs The supervisory role of the substance, but also to give full play to the securities regulatory system in three places the role of CSRC, save costs, improve efficiency, accounting firms can also delegate supervision of listed companies was placed under the authority directly subordinate to the provincial Municipal Securities Regulatory Bureau, shown in Figure 2, the audit by the accounting firm which they decided a public company (including the provinces of the listed company), when the audit, the audit several times, when released after the audit report, etc., to monitor are unified. Of course, Wang Securities Regulatory Bureau and between accounting firms no administrative affiliation, therefore, using dotted lines in Figure 2 connecting the local securities regulatory bureaus and accounting firms.


Fourth, the evaluation of the proposed
First of all, some would argue that accounting firms are service providers, how to become a regulatory body? In my opinion, since the accounting firm has a substantial regulatory capacity, why do not we take advantage of it? Second, the Treasury or Securities Regulatory Bureau and the Accountant Although there is no administrative office affiliation, but the Ministry of Finance or the CSRC has to decide which accounting firm has audited Which of several listed companies and audit powers, this will inevitably lead to corruption and rent-seeking new. I believe that this by an independent credit rating agencies to rate the accounting firm, audited by several levels of decision you can, Which public companies. and once when accounting firms audit the irregularities must be severely punished (if an existing corporate accounting firms must be transformed into partnership). Of course, the operating mechanism of the specific need of scientific Research and setting.

In short, the accounting firm "not independent" is a systemic problem, there are internal reasons, such as accounting firms are too small, business is often highly concentrated in a few customers who, independence compromised, there are external issues such as system not perfect, listed companies and securities underwriters local government intervention such as the corresponding laws and regulations and rules and regulations of the imperfect and the lag, internal governance structure of listed companies and their development status. The author's point of view from the securities regulatory system proposed to solve accounting method of office a weak position, just kind of idea what the extent of its operations and rationality, there are corrections to be Members of scholars and practical test. Links http://www.hi138.com Research Papers Download