Study On The Cause And Prevention Of Audit Failure Of Reanda Accounting Firm

One of the reasons for the rapid development of the capital market is that the CPA audit provides a strong guarantee for the rapid development of the capital market.However,due to the increasing number of audit failures in recent years,the audit report issued by certified public accountants has become the focus of public discussion.People began to question the quality of audit reports,which triggered a crisis of trust among investors,and the healthy environment of the capital market suffered a certain impact.In addition,the accounting firms and certified public accountants involved in the case will be punished by the CSRC,which will have a negative impact on both parties' economy and reputation.Therefore,how to prevent the recurrence of audit failure is a practical problem facing the audit industry in China.Firstly,this paper starts with the background,summarizes the domestic and foreign scholars' literature on the causes and countermeasures of audit failure with the method of literature research.Secondly,the concept of audit failure,principal-agent theory,information asymmetry theory and audit conflict theory are expounded.According to the administrative punishment announcement issued by China securities regulatory commission from 2013 to2018,the status quo of audit failure of lianda accounting firm is introduced from three aspects of punishment times,punishment methods and reasons.Then,the case study of the audit failure case of jiuhao group,the event with the largest amount of punishment in the past six years,is carried out.Based on the review of the case,the reasons for the audit failure are analyzed from four aspects: non-standard pre-trial investigation,implementation of audit procedures and inadequate quality control review.Finally,the paper puts forward the corresponding countermeasures for the causes of the audit failure,aiming at standardizing the professional behaviors of accounting firms and certified public accountants,improving the audit quality and preventing the audit failure.