Audit Failure Study Of Certified Public Accountants

In the 1980 s,China's CPA industry recovered,then the size and business scope of the auditing were expanding.The establishment of capital market and continued reform of state-owned enterprises cause certified public accountants industry developing fast.In the supervision system of market economy,the certified public accountants audit has become an important part cannot be replaced.With the deepening of China's corporate governance and capital markets maturing,a series of financial reporting fraud cases outbreak and the audit failure case is disclosed,which brought a big negative impact to the certified public accountants industry and caused people to question the role of certified public accountants as "economic police".On the basis of a large number of reference literature,this paper studies of the essence,reason,formation mechanism,harm and management of certified public accountants audit failure with R company as a case.First of all,we define the concept of "audit failure",and put forward the "reason" and "results" are two important elements of audit failure,and further point out that the audit failure happened to the two conditions: one is the management of financial reporting fraud,the other is certified public accountants.Second,we expound the concrete facts of financial fraud and audit failure in R company,and analyze the audit damage to various stakeholders.Again,analyze the reason of audit failure.Finally,on the basis of R company case,discuss and research the management and prevention mechanism audit failure from a certified public accountant,the registered public accounting firm,the audited internal governance and the regulatory environment.