The Research On Auditing Of Management-fraud

In recent years, the market economy has caused tremendous influence and strong resentment among the public due to a number of major exposures of management-fraud cases domestically and overseas, which hinders the healthy development of our society and economy. China's Zhong Tian Qin Certified Public Accountants and international accounting firm Arthur Andersen, one of the top five accounting firms in the world, close down because of the failure of auditing of management-fraud. Now the audit profession is facing a huge confidence crisis and even an existential crisis. Meanwhile, the public and regulatory authorities for auditing of management-fraud showed a huge demand. Therefore, in order to meet the demand of all aspects, the auditing of management-fraud model emerges. And now the focused issue of auditing firmament is how to manage fraud auditing effectively.Firstly, in this paper, we have researched a huge amount of domestic and international documents on the theoretical origin, development, and causes of management fraud prevention. And on this basis, we further discussed Wanfu Biotechnology (Hunan) Agricultural Development Co.,Ltd case, which relates to auditing of management-fraud, and all the documents involved that lay a firm foundation for that. And this article also introduces the auditing of management-fraud related theory, asymmetric information theory, cost-effective theory and principal-agent theory, and studied the current status of management development system of audit fraud, which proves that the implementation of auditing of management-fraud is extremely necessary. The text also elaborates the main factors of auditing of management-fraud obstacle are CPA's lack of independence, absence of law, limitation of the audit system and current auditing model and we also analyze the causes of auditing of management-fraud are mainly due to the insufficient supply and demand between the regulatory authorities and accounting firms, information asymmetry between management and auditors, and irrational allocation of costs and benefits of existing audit resources on basic theories. In this paper, we take Wanfu Biotechnology (Hunan) Agricultural Development Co.,Ltd. as an example, analyzing the failure causes by ZHONGLEI Certified Public Accountant Co.,Ltd. and the auditing process after management-fraud auditing outbreak. In the end of the paper, from aspects of establishing auditing of management-fraud standards. applying the use of special audit approach to manage fraud audits, maintaining CPA audit independence, whose aim is to optimize the game of supply and demand, improve the ability to practice the CPA and the rational allocation of resources, and other aspects of the audit, we also put forward some related measures of improving the auditing of management-fraud, which aims at achieving the purpose of giving suggestions of auditing of management-fraud.