Case Study Of Xintai Electric's IPO Audit Failure

Since the 21 st century,with the rapid development of China's capital market and continuous improvement,more and more enterprises hope that through IPO which is a low-cost means to get financing and better development opportunities.However,in China's capital market,listing qualification has always been scarce resource.Many IPO companies cannot help but choose to use IPO fraud to overstating the financial data in the hope of achieving the goal of to be listed.This series of IPO financial fraud cases has brought a huge negative impact to the healthy development of the capital market and badly hurt investor confidence.It also has made a bad influence on accounting firm who provide audit service to IPO company.As we all know,the SFC launched the most stringent financial review of listed companies in 2013,many problem intermediary companies are severely punished.Therefore,more and more scholars and experts began to focus on how to find IPO business financial fraud signs to control audit risk and avoid audit failure.Base on China's IPO audit failure problems,this paper analyzes current situation of IPO audit failure in China in recent years and summarizes the characteristics of IPO motives and IPO audit using normative analysis and case analysis methods.Select "Xintai Electric" as a case,through its IPO audit research and analysis to explore the reasons for its audit failure and the responsibility of related parties aiming to find measures to prevent the failure of IPO audit.The first chapter is the introduction.This paper introduces research background,research significance,research status at home and abroad,research content,research method and innovation point as well as the research technology road map.In the second chapter,based on the definition of audit failure and audit risk,this paper expounds the characteristics of IPO audit and the motives of IPO financial fraud.In addition,by summarizing the audit failures of ten IPO companies cases in recent years,this paper briefly introduces the current situation of the failure of IPO audit in China.The third chapter focuses on the case of "Xintai Electric" audit failure which has been discovered in 2016,introduces the basic situation of its case,exposes the problems in its financial information and the punishment decision from the regulatory body.The fourth chapter analyzes the financial fraud,the internal control defects,the audit risk,the review loopholes,the local government protectionism,the collusion possibility and the omission of the CPA audit process in the "Xintai Electric" audit,trying to find out the reasons for the failure of the audit.The fifth chapter is the last chapter of this article,based on "Xintai Electric" case,the author make recommendations respectively from the IPO companies internal control,accounting firm practice quality control,regulatory system protection,the other four aspects to audit failure prevention.