Study On Audit Failure Cases By REANDA

After more than twenty years of development,China's capital market has made remarkable achievements,but in the process of rapid development,also exposed a lot of shortcomings and disadvantages,the financial fraud of enterprises and the ensuing audit failure is one of the more serious problems,affecting the stability and healthy development of the capital market.This paper focuses on the causes and preventive measures of audit failure.Firstly,on the basis of fully absorbing and referring to the research methods and relevant conclusions of many domestic and foreign scholars on audit failure,This paper makes a brief introduction of lianda accounting firm and its audit failure cases so as to analyze the reasons and preventive strategies of lianda audit failure.Secondly,this paper takes the audit failure case of Reanda accounting firm,which has been punished for many times and is typical,as an example to analyze.In the process of analysis,the amount of fraud and detailed process of a single company are not introduced one by one,but the main reasons of audit failure cases are analyzed through induction and sorting.Specific as follows:(1)from the point of accounting firm,the internal reasons of audit failure mainly includes organization governance defects,such as the the management standards are inconsistent between headquarters and branches,the poorly structure of the firm during the conversion,etc.As well as the defects in business management,including the lack of rigorous acceptance and maintenance of customers in the business undertaking stage,the abnormal impact of audit fees on independence,the failure to fully identify and evaluate risks,and the inadequate implementation of basic audit procedures,etc;(2)From the point of external environment,due to the high intensity of competition and concentration in the audit market,accounting firms do not have an advantage in terms of active choice and bargaining power compared with the auditees,and may excessively accommodate the auditees for business,leading to audit failure.Also the financial fraud and fraud is the premise of audit failure.At the same time,China's relevant regulatory system is not perfect,and the punishment of the auditees,accounting firms,certified public accountants and other relevant subjects is too light,which makes the cost of breaking the law too low,and this condones the occurrence of financial fraud and audit failure to a certain extent.Finally,after analyzing the causes of audit failure,this paper puts forward countermeasures and Suggestions to prevent audit failure from the perspective of accounting firms and certified public accountants,the external environment of auditing and the supervision system.The former mainly includes optimizing the acceptance and maintenance of audit services,standardizing audit fees,carrying out audit based on risk and strictly implementing basic procedures,etc.The latter mainly includes relieving the pressure of competition in the audit market,encouraging the auditees to operate in good faith and improving the internal governance structure,strengthening the supervision of audit fees,and strengthening the comprehensive law enforcement of civil and criminal responsibilities.