Analysis Of Certified Public Accountants IPO Audit Failure Taking Reanda Accounting Firm Audit The Tianfeng Energy-saving Co.,Ltd. As An Example

With the development of economy,the ownership and management of the enterprise are separated.In order to supervise management activities of the operators,so certified public accountants audit comes naturally.In the capital market,certified public accountants audit plays an important role and has become an indispensable part in the control mechanism of market economy in our country.However,certified public accountants audit failure events occur frequently in recent years,especially in the audit of listed company,some companies even do financial frauds in the IPO stage.Audit failure events make the social public lose faith in certified public accountants,and certified public accountants industry is suffering the unprecedented credit crisis,and audit failure events have strong negative influence on society.In order to promote the sustained and healthy development of the certified public accountants industry,establish fair market competition environment,maintain the order of capital market effectively and avoid negative impact on the economy,it is very significant to study the reasons of IPO audit failure.In order to study the reasons of IPO audit failure,this paper cites three theoretical assumptions,including the “economic man” hypothesis,principal-agent and asymmetric information theory.At the same time,the paper combines IPO audit failure case of the Reanda accounting firm to Tianfeng energy-saving company.Further this paper analyzes the causes and consequences of audit failure,and puts forward the countermeasures.The study shows that:(1)the low quality of the certified public accountants is the direct cause of the audit failure;(2)the defect of accounting firm risk control is the main reason of the audit failure;(3)the enterprise financial fraud is the internal cause of the audit failure;(4)the non-standard audit market competition is the external cause of the audit failure;(5)the lack of policy supervision is the indirect cause of the audit failure.Based on the above analysis,we put forward the advice to prevent the audit failure:improve the professional quality of auditors,strengthen the accounting risk control ability of accounting firm,purify audit market environment and strengthen the supervision mechanism to certified public accountants.So as to promote the healthy development of accounting firm?certified public accountants?the enterprise and capital market.The main contribution of this paper lies in two aspects : in theory,this paper enriches IPO audit failure research literature and improves the theory and methods ofaudit failure;Then,the paper puts forward the advice to prevent the audit failure,which is advantageous to strengthen supervision and regulation;Finally,through the analysis of certified public accountants industry environment,it provides theoretical reference for establishing and improving the related laws and regulations.In practice,the certified public accountants audit is one of the important control mechanism of accounting information disclosure system,and it is the last line of barrier to prevent financial information fraud.This paper studies the reasons of the audit failure,which can prevent audit failure and improve the accounting information authenticity.In addition,the financial information is the important reference basis for investors.The financial information quality directly affects the decision-making judgment of investors,and this paper can also protect the interests of investors.Finally,this paper deeply analyses the reasons of audit failure and corresponding countermeasures have been proposed,which can have a certain practical guiding significance for the healthy development of capital market and optimize the efficiency of security market of our country.This article contains five parts: the first part introduces the research background?significance?ideas and methods and the basic framework of this article.The second part is about the the theory of audit failure,and it mainly states the concept and characteristics of audit failure,analyzes the influential elements of the audit failure combined with the “economic man” hypothesis ? principal-agent and information asymmetry theory.The third part introduces the IPO audit failure case of Tianfeng energy-saving company.This section mainly describes the details of the case,introduces financial fraud means of Tianfeng energy-saving company,and expounds the facts that the certified public accountants and Reanda accounting firm are punished after the audit failure.The fourth part deeply studies the audit failure case,and concretes analysis the reasons of audit failure,summarizes the reasons from the perspective of certified public accountants ? the company and external environment.Through the above case analysis,the fifth part draws the countermeasures to prevent audit failure for the current situation of the auditing profession in our country.In order to avoid audit failure,we put forward the corresponding policy recommendations,such as improving the qualities of certified public accountants,perfecting internal control of the accounting firms and standardizing the audit market competition.