Huaze Cobalt&Nickel Audit Failure Case Study

The economy is running smoothly and the capital market is improving day by day.Due to asymmetric information,the audit function of independent third parties is becoming increasingly prominent.However,in recent years,certified public accountants have also issued inappropriate audit opinions,resulting in audit failures,which not only damage their reputation,but also affect the effective allocation of market resources,causing huge losses to investors.The frequent occurrence of audit failures not only exposes the problems existing in China's supervision,but also reveals various problems existing in China's certified public accountants industry.Therefore,starting from the perspective of certified public accountants,this paper explores the relationship between audit failure and diligence through the analysis of the penalty notice issued by the CSRC.Moreover,this paper selects Ruihua Institute,the latest punishment,to conduct a specific study on the audit failure of cobalt and nickel in Hua Ze,analyzing the reasons for the failure of diligence and puts forward specific countermeasures,so as to help certified public accountants better play the supervisory role of "economic police" and improve the credibility of audit reports and enhance the confidence of investors.This paper adopts the combination of normative research and case study,expounds and sorts out the research background,research significance,related literature review,research methods and frameworks.And starting from the reasons,consequences and prevention of CPA audit failure,it sorts out the related researches of scholars at home and abroad.At the same time,the concept of audit failure and diligence is also defined.Through the analysis of the supervision status,audit failure and the diligent analysis of the CPA by the CSRC penalty notices,the relationship between audit failure and diligence was explored.In conclusion,the main reason for the audit failure was that the CPA did not perform diligently.And then a specific case of audit failure,the Huaze Cobalt Nickel,is briefly explained.Basing on this case,fraudulent means,unrelenting performance and the consequences of audit failure are analyzed.The reasons for diligence are deeply explored on three dimensions for supervision,accounting firms and CPA.The corresponding countermeasures and suggestions are put forward from the three dimensions.It is hoped that audit failures can be reduced or avoided,market stability can be maintained,and investment efficiency can be improved.Through systematic combing and analysis,innovations have been made in two aspects.Firstly,in terms of research content,most of the articles are descriptive statistical analysis of the penalty announcements issued by the CSRC,based on this,this paper selects representative cases and provides an intuitive display of the relationship between audit failure and diligence,enriching the present situation.Secondly,from the perspective of research,taking the diligent and responsible work of certified public accountants as the breakthrough point,this paper makes an in-depth analysis of the causes and puts forward corresponding suggestions,which have strong practical significance and enriched research at the micro level.However,there are still deficiencies in the singleness of cases and the limitation of data,which need to be further explored and enriched.