Research On Audit Failure Of Xinghua Based On The Case Of Xintai Electric

The reliability and fairness of financial reporting information are necessary conditions to ensure the healthy development of the capital market.The performance of the capital market can reflect the economic status of a country or region.In the capital market,information related people need to rely on financial reports to understand information.This requires independent third parties to audit financial statements to increase the value of the report.However,there have been a large number of financial frauds in the stock market in recent years according to the punishments of the China Securities Regulatory Commission(CSRC).Because of the lack of risk awareness of CPA and lack of professional prudence and many other reasons,the final announcement of improper audit opinion has brought adverse effects on the securities market,which restricts the healthy development of the securities market.Therefore,finding out the deficiencies in the audit of CPA and accounting firms and reducing the occurrence of audit failures are important tasks of auditing.Firstly,the paper expounds the research resultsresults of scholars at home and abroad;Secondly,this paper expounds four r elated basic theories,including principal-agent theory,insurance theory,audit conflict theory,signal transmission theory and audit failure,as well as the concept of quality control in accounting firms.Thirdly,the paper makes statistics on the audit failure and punishment of accounting firms,and analyzes and summarizes the reasons for the CSRC punishment.On this basis,this paper analyzes the reasons for the failure of Xinghua's audit of Xintai electric from four aspects,including the audit subject(certified public accountants and firms),the object of audit and the audit environment,and then puts forward the preventive measures for the audit failure.Through the analysis and research on the failure of Xintai electric audit,and the corresponding some solutions,it is helpful to reduce the audit risk,improve the audit quality and reduce the occurrence of audit failure.