The Study On The Issue Of Audit Failure In Chinese Capital Market

With the increasing establishment and development of Chinese capital market, the quality of accounting information catches people's huge attention, so the audit opinion of the Certified Public Accountant that provides the reasonable assurance of the accounting information has naturally becomes a focus of people's attention. However, in recently years, a series of corporate financial scandals and the exposure of related audit failure cases by Certified Public Accountant and the fallen of the accounting firms are making the national identities of Certified Public Accountant under unprecedented credibility doubt and challenge.Chinese current capital market belongs to emerging markets and also the transition of the market economy. The immature of market and the problems left over by history during the transition process are prone to lead to various types of audit failure on the capital markets. And the Certified Public Accountant, as modern society's "economic police", the level of its audit degree plays a crucial important role on the capital market as well as socio-economic health of the whole operation. Therefore, the study on the issue of audit failure can improves the quality of listed companies and the audit quality of Certified Public Accountant. At the same time, it has a great practical significance and value of policy guidance on the healthy development of the emerging capital markets and the accounting profession.This report puts forward three major imbalance in Chinese capital market—the power imbalance, supply and demand imbalance, contradictions imbalance, and studies the failure of the audit failure questions mainly from the imbalance of Chinese capital market perspective. It regardes the mainly reasons of the current audit failure cases in Chinese capital market as the power imbalance of subject & object during the auditing, and the defects of the commissioning, the imbalance of market supply and demand, the imbalance of the external capital market mechanism and incentive mechanism. And through the respective research and analysis of them, it holds that in order to be able to prevent the occurrence of audit failure,we can design three checks and balances mechanism about the audit subject & object and the relationship between them, the relationship between the supply and demand in audit market, and the constraints and incentives in capital market.