Research On Auditfailure Ofaccounting Firms

With the rapid development of China’s capitalist market,the market economy has gradually entered a new stage.Audits by accounting firms have also escorted the orderly operation of the market economy,but at the same time,audit failures have repeatedly occurred,which seriously affected the market economy.Healthy development.In order to gain more benefits,listed companies will not hesitate to conduct financial fraud,blinding investors,breaking the situation of market stability,damaging the interests of investors,and weakening the public’s trust in the audit profession of certified public accountants.At the same time,financial fraud Exposure will also make it difficult for business operations to continue,leading to final bankruptcy liquidation.All kinds of unfavorable factors will become the driving force that may lead to the abnormal development of the audit industry in China.In the face of such unfavorable circumstances,this paper chooses the classic case of failed audit of Huaze Cobalt and Nickel by Ruihua Certified Public Accountants.Based on the analysis of the case,the relevant factors of the audit failure of the accounting firm are summarized and targeted effective measures are proposed.This paper uses a combination of theoretical analysis and case analysis to comprehensively analyze the audit failure.First,the concept of audit failure and related theories are explained.Next,combining the detailed case of Huaze Cobalt Nickel audit failure,it is divided into several aspects to analyze the audit failure of Ruihua Certified Public Accountants,including: accounting firm risk Lack of identification ability,low implementation rate of quality control system,CPA did not understand the comprehensive situation of the audited unit,did not maintain due professional suspicion,lack of independence,inadequate social legal system,weak audit penalties,and industry regulatory standards Unification,these factors will have a critical impact on the failure of the audit;finally,after the summary of the entire case,the corresponding rectification measures are proposed: improving the risk identification capabilities of accounting firms,improving the overall quality control of accounting firms,and improving The professional competence of CPAs,the independence and skepticism of CPAs,the government’s improvement of rules and regulations,increased punishment,and joint supervision by regulatory authorities.Based on the main ideas of raising problems,analyzing problems,solving problems,and suggesting improvements,this paper has conducted in-depth research on the audit failure of accounting firms,summarized the influencing factors of audit failures of accounting firms.Also the paper proposedsomethe audit risk prevention measures.Above all of these have a comprehensive reference significance for accounting firms to respond to audit failures.It is hoped that they can provide practical audit strategies for certified accountants to effectively identify audit risks and respond to audit failures in the future,and supervise the registration of government and relevant departments.The accountant profession provides reasonable punishment suggestions to reduce the probability of failure of audit cases.