The Role of External Auditors in Detecting and Reporting Corporate Fraud in Public Listed Companies in China

With only 30 years development of Chinese capital market, especially the listed companies and audit profession, there are still some deficiencies compared to the UK which limits the role of external auditors. With the comparisons in the legal and regulatory framework governing external auditors and the responsibilities of external auditors in detecting and reporting corporate fraud between the UK and China, these differences can reflect some difficulties for Chinese auditors in detecting and reporting corporate fraud. Hence, semi-structured interviews are conducted to collect information about the practical difficulties in their audits of listed companies in detecting and reporting fraud in China. In order to strengthen the role of Chinese auditors in detecting and reporting corporate fraud, some recommendations are made finally.