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美国独立审计论文-Do Non Audit Services Impair Audit Independence?

美国独立审计论文-Do Non Audit Services Impair Audit Independence?(由英国论文网-英文论文代写中心提供)


Introduction and Motivation
Many audit firms suffered audit failures recently in China. Deloitte & Touche became involved with Kelon’s scandals, giving out unqualified audit reports on Kelon’s financial statements which contained material errors. KPMG was forced by the Chinese Ministry of finance to restructure. The other BIG 2 also got into trouble. Once again, the audit independence issue draws the public’s attention.

There is a long-standing public policy debate about whether an audit firm should be allowed to provide both audit services and non-audit services (NAS) to the same publicly held company in western countries, especially in the US after the Enron scandal. The Securities and Exchange Commission (SEC) speculates that ‘this relationship may impair investor confidence in the auditor independence and lead to declining confidence in public capital markets.’ ‘The audit function is simply being used as a springboard to more lucrative consulting services’, stated Levitt, SEC Chairman.

However, in China, the audit situation is different from western countries. The major services provided by audit firms are audit services. NAS is only a small part of the total services provided by accountancy companies. Audit failures persist in this context. It is worth mentioning that many of those audit failures occurred due to the auditor’s shortage of relevant business information. The question of whether NAS should be promoted in China has become a hot topic recently.

The motivation of this research is to learn from western countries’ audit experiences and form the Chinese audit formulation to regulate the audit market better. Under the circumstances of economic globalization, more and more foreign companies are getting into the Chinese market. The regulated audit market is necessary and essential to attract the foreign investment, which seek legal protection and audit credibility. Moreover,a regulated Audit market can help Chinese accountancy companies to meet the fierce competition of foreign accountancy companies. Most importantly, regulated market will raise the public confidence towards the financial statements provided by accountancy companies, and therefore promote a more efficient and healthy stock market. 

Should we promote more NAS in china? In order to answer this question, there are two steps to follow. The first step is to analyze whether the NAS impairs audit independence. The second is to address how essential the NAS is in today’s Chinese climate. Case studies will be used in this article to solve these problems. Most previous research uses experimental methodology to analyze whether there is a negative relationship between NAS and audit independence by investigating the non-audit fees. However, the audit services and NAS’s characteristics themselves have never been mentioned. In this article, real life cases will be used to analyze the independent issues. In particular, the nature of Audit and NASs will be analyzed. Two real life cases will be utilized. One is the Enron scandal and the other is a Chinese audit failure suffered by Zhongtianqin accounting company. The conclusion that there is no direct relationship between companies providing NAS and impairment of audit independence will be given, by analyzing the Enron case. By analyzing the Chinese audit failures, we can draw the conclusion that NAS should be promoted in China.



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