Case Analysis On Audit Failure Of Shinewing Auditing DengYun Company

Market economy is the inevitable outcome of social development to a certain stage.It has greatly promoted the progress of the times and significantly improved people's quality of life.It is not known that behind the highly developed economy,it hides various drawbacks.Competition between companies has become increasingly fierce under the influence of the market economy.Some companies have to whitewash their financial statements in order to seek listing or after successful listing due to competition and performance pressure.The credibility of financial information is getting lower and lower,which seriously endangers the smooth and healthy operation of our capital market.In this context,the majority of investors to the listed companies more and more high audit quality requirements,more and more rely on audit reports.At this time,certified public accountants as the capital market "see the family" can effectively prevent enterprises that do not meet the standards from entering the market,thus ensuring the healthy operation of the economy.However,the certified public accountants responsible for auditing the financial statements of these companies issued standard audit reports.Audit failures frequently occurred.Even the large listed companies under the responsibility of well-known firms also had financial fraud problems.The audit quality had to be worried.The untrustworthiness of financial reports has seriously damaged the interests of investors,destroyed the capital market's operating allocation mechanism,and at the same time made the certified public accountants 'professional ability and professional ethics highly doubted,and seriously affected the credibility of the auditing industry,and even caused a trust crisis to the society.Based on this,the detailed analysis of audit failure cases is of profound significance to improve the quality of audit,purify the audit industry,and rebuild the confidence of the majority of investors.In this paper,the theoretical research runs through the failure cases of Xinyong Zhonghe's audit of Dengyun's shares,and puts forward his own thinking at the same time.In the first part,it introduces the background,significance and research results of Chinese and foreign scholars.In the second part,it explains the definition of audit failure and other related and confusing concepts.At the same time,it explains the general reasons,impact,and theoretical basis of audit failure.In the third part,this paper analyzes the failure cases of the audit of dengyun shares in Xinyonghui in detail,in which the author introduces the punishment decision of the audit owner,the object,the securities Regulatory Commission,and the concrete performance of the case failure.Among them,the main means of financial fraud of Dengyun shares are: inflated profits,illegal borrowing,concealment of related parties and transactions.The concrete manifestation of the failure of Xinyong and the audit is: insufficient verification of income,expenses,and failure to effectively identify related parties and transactions.In the fourth part,starting from different subjects,the author analyzes the deep causes of case failure.Among them,the reasons attributed to CPA and the firm are: failure to maintain professional suspicion,poor ability to practice,loss of independence,management model,and imperfect quality control system.The Dengyun shares are mainly due to the motives for fraud and the failure to effectively implement internal controls.In addition,the external environment of our country also has many problems,including: irregular competition,defective regulation,low binding force of laws and regulations.In the fifth part,the conclusion of this article is drawn.Including "the lack of CPA independence is the direct cause,the imperfect quality control system of the firm is the indirect cause,Huaiji Dengyun is the root cause of financial fraud for a successful IPO,the external environmental defects of IPO audits and administrative supervision loopholes are the external causes" and other four points.And summed up the case revelation,It covers four aspects: "it is the key for certified public accountants to establish a targeted audit process for related party transactions,the foundation for accounting firms to strengthen risk prevention and control and improve the quality of practice,the basic approach for listed companies to optimize internal control and governance structure,and the improvement of external supervision system is the guarantee."Based on the case analysis method,this paper explores and analyzes the recent case of financial fraud of Dengyun shares in detail,combs out the specific manifestations and deep causes of failure,and summarizes the conclusion and enlightenment of the case.In addition,with the help of the literature review method,the author systematically expounds the views of some well-known experts and scholars at home and abroad,clarifies the definition,impact,common reasons,and preventive measures of audit failures,and accumulates solid theoretical knowledge.The author hopes that this article will make a contribution to the theoretical study of audit failure.At the same time,it can cause the auditors,objects,industry associations,and relevant government departments to think about it.They will consciously assume their own responsibilities and strive to create a good atmosphere of integrity for the society.At the same time,it leads the auditing industry to a better and healthier direction.Based on the case analysis method,this paper explores and analyzes the recent case of financial fraud of Dengyun shares in detail,combs out the specific manifestations and deep causes of failure,and summarizes the conclusion and enlightenment of the case.In addition,with the help of the literature review method,the author systematically expounds the views of some well-known experts and scholars at home and abroad,clarifies the definition,impact,common reasons,and preventive measures of audit failures,and accumulates solid theoretical knowledge.The author hopes that this article will make a contribution to the theoretical study of audit failure.At the same time,it can cause the auditors,objects,industry associations,and relevant government departments to think about it.They will consciously assume their own responsibilities and strive to create a good atmosphere of integrity for the society.At the same time,it leads the auditing industry to a better and healthier direction.