Study On Annual Report Audit Failed Case Of The DZH By The BDO

With the continuous development of the economy,China's securities market has been greatly prosperous.But too rapid development has also exposed many drawbacks in the securities market.In recent years,financial fraud continued.The China Securities Regulatory Commission imposed administrative penalties on 28 listed companies involved in financial fraud in 2014-2016.Nine of them involved their current accounting firm and certified public accountant.In other words,nearly one-third of the accounting firms failed to perform their due responsibilities and led to the failure of the audit.Endless audit failures,has an extremely adverse effect on the normal development of the capital market.Therefore,exploring the cause of audit failures in accounting firms,it is of positive significance for accounting firms to prevent audit failures.This article takes BDO's case study on the audit of the DZH Annual Report as an example.First of all,through the domestic and foreign literature on the cause of the failure of the audit combed.Then,sort out the basic concepts of financial fraud,audit failure related concepts,and accounting firm audit failure.Then began to discuss the details of the failure of annual report audit of the DZH by the BDO.Point out the problems in auditing of the BDO,failure of risk assessment procedures;no effective audit procedures have been designed for exceptions;did not adjust the year-end awards by accrual basis;no adequate and appropriate audit evidence was obtained for the determination of the purchase date of shares.Based on the related theory of audit failure,this paper deeply analyzes the reasons for the audit failure from auditors,the BDO,government supervision and audit market.Finally,it proposes that the audit failed because of audit failure.First of all,Auditors should strengthen their understanding of the industry knowledge of the audited entity,Maintain reasonable professional care,Strengthen the use of analytical procedures,design effective audit procedures and put them in place,Improve the quality of audit evidence;Second,the BDO should reasonably allocate auditors,strengthen audit communication,strictly implement the audit review system,and improve the employee responsibility system and employee performance appraisal system;Finally,the government must establish a special "regulatory agency",improve the civil compensation system as soon as possible,increase the administrative punishment for firms and CPAs,Construct an "oligarchic" audit market structure.