Research On The Causes And Preventive Measures For Auditing Failure Of Accounting Firms

With the increasing prosperity and development of China's capital market,audit plays an increasingly important role.Audit provides reasonable guarantee for the authenticity and integrity of enterprise financial statements.Auditing is also an important means of maintaining the orderly and healthy development of the capital market.However,with the company's financial fraud in recent years,accounting firm audit failure cases have been constantly disclosed.By sorting out the administrative penalty decision letters issued by the CSRC on accounting firms that failed in auditing from 2009 to 2018,it was found that the CSRC punished accounting firms 35 times and signed 83 times of certified public accountants.The endless occurrence of audit failure cases also has a negative impact on the development of the capital market.For users of audit reports,audit failures will lead to the flow of false financial statements to the market,making it impossible for users of financial statements to understand the true financial situation of the company and affect its correct judgment,resulting in economic losses.For the auditing entity,the audit failure will not only bring economic losses,but also affect the reputation of the firm's industry,which is not conducive to the future development of the firm.In recent years,with the continuous revision and adjustment of audit standards in China,the supervision and management of the audit market by relevant regulatory departments has become increasingly comprehensive and strict.It is particularly necessary to put forward preventive measures to improve the audit quality of accounting firms by analyzing the reasons for audit failure of accounting firms.This paper uses the literature research method to summarize the research results in the fields related to audit failure consequences,audit failure reasons and audit failure prevention countermeasures.It is based on information asymmetry theory,"rational economic man" hypothesis theory and audit conflict theory.And define the concept of audit failure and audit risk.Combined with the punishment decision of CSRC on audit failure of accounting firms in recent ten years,this paper analyzes the current situation of audit failure of accounting firms in China from the following four aspects: the number of audit failure events,the subject to be punished,the cause of audit failure and the penalty intensity.And nearly a decade X certified public accountants audit failure case occurred the most times as the research object,using case analysis focuses on analyzing the past three years because of audit failure by CSRC three cases of the punishment,from the aspect of certified public accountants,certified public accountants two angles to analyze the reason of audit failure.Then combined with the analysis of the reasons for audit failure,taking X office as the entry point,the paper puts forward the countermeasures for audit failure from the macroscopic point of view: CPA should strictly implement the audit procedures and strengthen the construction of professional ethics;accounting firms should improve the internal management system and the quality control system.It is expected that the audit quality of accounting firms can be improved,audit risks can be reduced and audit failures can be reduced through the joint efforts of audit subjects and relevant regulatory departments.The reduction of audit failure cases will help improve the credibility of the audit industry and optimize the efficiency of China's capital market.