Accounting Firms To Circumvent The Occupational Risk Of Response Mechanisms

It's unavoidable auditing risk that each Certified Public Accountants (CPA) have to face, this is related not only to uncertain components of auditing target but also to technical and moral failure of auditor and CPA to which the auditor belong. In the year of 2000,one of the most famous CPA-Arthur Andersen in USA was sued by university of California because of polishing finical report, false statement as well as cheating investor. Similarly, in the same year, the top CPA in shen zhen - zhongtianqin was brought to account and sued related yingguangxia by the same accusation as Arthur Andersen. It's seems that the problems of CPA are more likely from objective and moral aspectsIn China, CPA confronts two problems: the development and safety of CPA industry during the current social transition. The development of industry involves multi-business and competition of market share while industry safety is related to auditing risk avoidance and prevention. The author's research reveals that with the development of external lawsuit restriction moral risk of CPA will decrease while quality of CPA will increase. Based on the research, the author designs and establishes a series of auditing risk avoidance system.Firstly, the author introduces core contents which is related to risk-oriented auditing theory and points out the weakness. Secondly, analyze the consequences of CPA's failure as well as what causes auditing risk.Thirdly, according to the above analysis, further risk-oriented model-educed by lawsuit risk and moral risk. Lastly, put forward a series of measures to control auditing risk.