Research On The Audit Failure Case Of Beijing Xinghua Auditing Xintai Electric Co.,Ltd

With the rapid rise of economy and science and technology,the demand for auditing in the capital market has been increasing.The role of certified public accountants considered as "economic police" has become increasingly important.However,audit failure cases which continuously occurred caused huge economic losses to investors,and also made CPAs and firms to fall into the crisis of lack of credibility.At the same time,new business forms and accounting methods also impose higher requirements on the capabilities and qualifications of CPAs.Therefore,analyze the characteristics of audit failure,and explore the problems of auditors in the specific audit business and the underlying causes of audit failure.Based on this,it is important to summarize the countermeasures to control audit risk prevention audit failure.In this paper,the achievements of scholars at home and abroad are studied firstly to enrich the theoretical basis of the paper.Then review the audit failure case of Xintai Electric Co.,Ltd,and analyzes the impact of its counterfeiting methods on the auditing risks of CPAs and the issues.Then,based on risk oriented audit the theory,the author analyzes the deep factors that lead to audit failure from three perspectives:the CPA and the firm,the audited entity,and the social environment.First of all,the auditing risk awareness and professional ethics of CPAs need to be improved,and there are deficiencies in firm independence and quality control.Second,the audited unit is a typical family company with poor internal governance environment and financial fraud to meet the IPO conditions.Finally,the auditing competition and appointment mechanism in the social environment needs to be improved,and industry supervision and punishment are insufficient.Then according to Xintai Electric Co.,Ltd case analysis results,it mainly provides corresponding countermeasures and suggestions from both the audit subject and the social environment.The CPA firm and the CPAs enhance the employees' comprehensive quality and professional ethics,and the CPA firm strengthens the independence construction and improves the business.Quality control system construction;the supervisory level should improve the audit market access,improve the audit engagement and strengthen market supervision to increase fraud costs.