Listed Company Audit Failure Reasons And Countermeasures

With the development of the economy and the prosperity of commerce,modern enterprises are facing the characteristic by the separation of ownership and management rights.This feature means that the owner of the company does not directly participate in the business activities of the company,and thus cannot grasp the comprehensive information of the enterprise.At the same time,the managers of the company do not own the company,and thus do not always think about the long-term interests of the company as the owner.In the case of such a serious separation of ownership and management rights,the value of CPA audits has risen sharply.The audit of CPA is intended to provide reasonable assurance for financial statements for business owners and prospective users,and to build a bridge of trust for business owners and operators.However,contrary to expectations,corporate audit failures have occurred in recent years,most of which are related to financial fraud,the lack of diligence of CPAs,the weak quality control system of accounting firms and poor supervision.China's CPA auditing industry is in a period of vigorous development,and audit failure has undoubtedly brought a serious blow to the development of the auditing industry.Therefore,it is particularly important to analyze the causes of audit failures and the countermeasures.This paper mainly adopts the case study method,taking the failure of*ST Sinopharm audit as an example,and been divided into six parts to study the audit failure problem.Firstly,starting from the research background,research significance and literature review,this paper expounds the research results of domestic and foreign scholars on audit failure and financial fraud,and proposes the research framework of this paper.Then it defines the audit failure,and shows the theoretical basis of audit failure and financial fraud.It focuses on the audit failure and lays a foundation for the analysis of the*ST Sinopharm audit failure case.The third and fourth parts are the research focus of this paper.The third part mainly introduces the case introduction of*ST Sinopharm,violation of laws and regulations,financial fraud means and event punishment.The fourth part mainly analyzes the failure of*ST Sinopharm audit and explains the existence of BDO in the audit process.The related party audit procedures are not in place,the steel trade income audit procedures are not in place,and the risk assessment procedures are not in place.Further analysis and analysis of the four reasons leading to audit failure:First,the level of CPA-unfulfilled diligence and lack of professional suspicion;second,the level of accounting firms-the existence of the quality control system of BDO.The defect is weak.Thirdly,the level of the audited entity-the internal financial fraud of the audited entity increases the obstacles for audit verification.Fourth,the level of legal supervision-external supervision punishment is flawed,the punishment is insufficient,and it is not timely enough.In the conclusion,we get the enlightenment from the case analysis,and prevent the audit failure from three angles and make suggestions:First,propose prevention and suggestions from the perspective of CPA require CPA to maintain professional suspicion,ensure audit quality,and strictly enforce morality.Secondly,from the perspective of accounting firms,it puts forward prevention and suggestions,requires accounting firms to enhance audit independence,strengthen the auditing quality control system of accounting firms,and deeply understand and carefully select customers.Third,propose prevention from the perspective of supervision.It is required that the company should improve its internal control,the supervision bureau and the CSRC to jointly supervise the external audit of enterprises and strengthen the supervision of external supervision units.