Audit Failure Analysis And Prevention

In our country, the industry of CPA has a history for more than 20 years, and the CPA is praised as "the economic police". However, with the audit failures revealed, the CPA had not the responsibility, and even brought great negative effects. Auditing failures not only cause enormous financial losses to investors, but also seriously affect the healthy development of the capital market of a country, especially the capital market of China.With the developing of company in our country, more and more audit failures are revealed, and they give people more and more shocks. Audit failures bring great negative effects on the industry of CPA in our country. Under this background, it is especially necessary to research on audit failures systematically and thoroughly. What is audit failure? What is the harm of audit failure? What causes audit failure? How to prevent audit failure? Those are what this article researches on and try to answer. On the base of referring to large amount of related literatures and documents of both domestic and overseas, this article systematically researches the definition, harm, causes of audit failure as well as prevention methods.This article is divided into six parts.The introduction gives the reason of choosing this subject, research method, main content and innovative standpoint.The first part analyzes the concepts of audit failure that already existed, and then gives the definition of audit failure in this article. After that, it differentiates on the related concepts and gives their contact and the differentiation.The second part mainly introduces the harm that is caused by audit failures to each aspect of society.The third part places the history case of audit failures in our country. Then analyzes the cost and income of the " YinGuangxia" from the angle of economics.The forth part introduces the internal and exterior reasons. The internal reasons include the CPA and the audit customers. The exterior reasons include the non-perfect market environment and the system of accountancy and audits.The fifth part mainly introduces the means of prevention from the angle of the internal and exterior reasons.