Accounting information quality inspection and audit quality

Accounting information quality inspection and audit quality

Chen,Ying

CanvardCollege,BeijingTechnologyandBusinessUniversity

1Institutional background

According to the accounting Law, the financial department of The State Council is in charge of the national accounting work, and the local governments at all levels are specifically responsible for the management of the local accounting matters. Since the reform and opening up, state-owned enterprises have implemented the financial approval system of financial statements, but after 1998, the financial statements of state-owned enterprises were entrusted to the audit, which changed the accounting supervision work of the state financial department from direct to indirect. Accordingly, the Ministry of Finance decided to establish an accounting information quality inspection system for the financial statements audited by the Association. Accounting information quality inspection is a work of the national financial department to conduct a comprehensive inspection of the accounting information quality of enterprises in accordance with the relevant laws and regulations and the audited statements of the China Accounting Association (Gao Jinxing et al., 2009). From the inspection of the object, the inspection work mainly focused on the national economy foundation industry and pillar industries and investors and the social public concern, not only check the enterprises and institutions, and the accounting firm accounting information quality inspection, since 2002 after the Treasury note association of administrative supervision function, the inspection of accounting firms from extending into an important part. Before 2005, the Ministry of Finance and local governments had carried out the quality inspection work of accounting information, but after 2005, the Ministry of Finance organized the Ministry of Finance and the Ministry of Finance to carry out the accounting information quality inspection work of the country and the local governments under their jurisdiction. The accounting information quality inspection organized by the Ministry of Finance has lasted for decades, making great contributions to the healthy development of enterprises and institutions, the standardization of the audit industry and the risk control of the capital market. However, there are still many problems in the implementation of norms and the system itself, facing huge pressure and challenges.

2 Theoretical analysis

Foreign studies have found that if the government strengthens accounting supervision, accounting firms will be severely punished by the Securities and Exchange Commission (SEC), which will severely lose their reputation, eventually leading to fewer clients and lower audit revenue. However, there is still no consistent conclusion on the impact of accounting supervision on audit quality. The studies of domestic scholars explore the relationship between government accounting supervision and audit quality from the perspective of government audit, administrative punishment of CSRC, China Note Association and non-administrative punishment supervision of stock exchange, but no consistent conclusion is reached.