The independence of auditors is growing, listed companies win the trust through their own performance and good performance of cause it can win the trust of the investors, companies are Aware of the role of audit to the company's long-term development, they enhance the communication and cooperation with auditors to win the trust of the public.
In recent years, the public is increasingly concerned about the audit, gradually realized that the role of the audit.
However, the public did not have the ability to distinguish whether the auditor is competence of the experts. The establishment of the status of the experts have to rely on the system. Therefore, when the independence requirements and professional ethics come into conflict with the interests, there must be a force for auditors ,making it difficult to violate law and discipline to succeed. This unit detached force is the media. Media can make use of its exposure capacity to make the checks and balances function effectively, to restrain and control effectiveness of Audit regime.
In order to prevent the relationship between the two too closely, the Commission have developed regular rotation of audit firm. The audit partner and reviewing partner must rotate five years, Auditors have to report to the company's audit committee.
The employment relationship between accounting firms and audited enterprises also changed. Of former norms system, the auditors employed by the audit business, if they are not satisfied with the audit report audit companies, accounting firms will be fired. This awkward relationship hindered the authenticity of the audit report. Take Arthur Andersen, for example, each of Enron's audit fees paid to Arthur Andersen firm are high of 25 million dollars, making a huge income in the cost of losing independence of audit report issued by Arthur Andersen. To ensure the independence of accounting firms, audited companies can not directly choose accounting firms, there should be an independent third party for its choice. In addition, the Arthur Andersen was Enron's auditor for 16 years since its establishment. 16 years of close co-operation will have a certain impact on the independence. Between the familiars and non- familiar, people harm the interests of those non- familiar. Audit fees should be specified by the Securities and Futures Commission for listed companies in order to provide a good external social audit of the audit environment, enhance the authenticity of the audit report.
In recent years there is no fundamental change in auditors assess the system. Auditor's professional standards level of professional ethics have raised.
If auditors provides an wrong message, they have to compensate investors part of the Economic loss in the form of economic resources, this Requirements has been Strengthen this years. Practice has proved that this approach has played a very active role in promoting trust in the establishment and consolidation of the audit.
Partially reimbursed investors, economic losses by the auditors, not only investors can reduce losses by purchasing of audit services, but they also in part to obtain financial security. One of the great role of the process and results is to enhance the confidence of investors to the audit. This trust is an important guarantee for the survival and development of the audit.
Causes
Most of Significant changes comes from Enron scandal. December 2, 2001, Enron officially filed for bankruptcy protection with bankruptcy listed assets of 49.8 billion U.S. dollars and it become the largest bankruptcy in U.S. history enterprise.
Enron was once all-powerful "energy empire", with total income of up to 100 billion dollars in 2000, ranking the seventh among the "Fortune 500" magazine.
October 16, 2001, Enron published financial report of third-quarter of the year， announcing that the company losses totaling 618 million U.S. dollars which attract investors, media and management’s attention. (Asthana, Balsam,and Kim, 2009)
