A Case Study On Auditing Failure Of CPA Of QZ Company

In recent years, the listed company financial fraud case occurred frequently, the quantity and nature are more and more serious. In November 2015, Sinovel punished by CSRC for counterfeiting performance of 270 million,and involved RE AND A firm's qualifications of business sponsor suspended for 3 months. In January 2016, TCICL published that they had inflated income 1.147 billion. In February 2016, KangHua Agricultural Company step to backdoor listed shares,are critical for three years of financial fraud by the way of inflated assets of 1.5 billion, and so on. A large number of serious financial fraud case and related audit failure who happened these years not only caused huge losses to investors, shaken investor confidence, and also damage the capital market order badly. At the same time, these things have to be responsible for the great negative impaction they made to the financial statements audit of certified public accountants industry. On the one hand, the certified public accountants sinking into the predicament in career due to the constant increase of the audit risk and the audit cases of rising. On the other hand, frequent occurrence of financial statement fraud makes more investors to doubt the independence and reliability of the social auditing, professional image of accounting and auditing industry are destroyed.This paper uses the combination of system analysis and case study research method,from the background of BDO failed the audit of QZ company's financial statements,mainly studies the problems and related reasons in the process of BDO failed the audit for QZ, which are high audit fees affect the independence of certified public accountants,CPAs not maintain their professional competence and professional skepticism, the quality control system of the public accounting firm is defected, the illegal cost is low and the illegal punishment strength small in the entire capital market. Targeted prevention strategies are put forward for the above reasons,such as to strengthen the constraints of professional ethics, to raise the level of audit quality control, to maintain professional competence and the due diligence, to perfect the market regulation,.The significance of this paper is that, from the perspective of certified public accountants, based on the analyzes to the case of audit failure to the QZ company,explore the problems and reasons in the process of audit process, and specific preventive measures and suggestions are put forward,to help prevent similar cases happen in the future.