Research On Influencing Factors And Control Strategies Of Audit Failure

In recent years,China's audit failures have occurred frequently,seriously shaking the confidence of investors and capital markets,and posing a serious threat to the orderly operation of the capital market.Looking for the reasons for audit failure,and then put forward some effective controlling strategies,it is essential to prevent the occurrence of audit failures,regulate the behavior of capital markets,and establish investor confidence.This article takes a case report of 47 punishments issued by the China Securities Regulatory Commission on its official website in 2007-2018 on the official website,and conducts a relatively detailed statistical analysis to extract the characteristics of audit failure.On this basis,the characteristics are further classified,and the four factors affecting the audit failure are summarized.Based on the in-depth analysis of the four influencing factors,the countermeasures against audit failure are proposed.It can be seen from the penalty announcement that the current status of audit failure in China has the characteristics of volatility in auditing,less penalties and lags,violation of auditing standards,auditing failures covering the concentration of accounting elements,concentration of auditing in annual audits,and concentration of auditing failures..This paper summarizes the four main influencing factors of audit failure,namely government supervision,auditing standards,audit clients and accounting firms.Among them,government supervision factors include two aspects,insufficient high-quality audit requirements,lagging supervision and lighter punishment.The auditing standards that audit failures are mainly evidence and audit evidence,and the guidelines are characterized by ambiguity and lack of guidance.Auditing customer fraud,especially management fraud,is a major factor in audit failure.In the case of CPAs and accounting firms,the former did not perform diligently and the audit procedures were not in place,and the latter's quality control mismatch and lack of guidance were the reasons for the audit failure.Therefore,in order to reduce the occurrence of audit failures,it should be managed in a number of ways.The government must build a good external environment,including actively promoting marketization,improving high-quality auditing requirements,strengthening supervision and increasing penalties.As a programmatic document of the audit work,the auditing standards should reduce ambiguity on the one hand,and adopt various possible channels to improve guidance on the other hand.Audit clients should improve their internal control systems and governance structures.In the aspect of accounting firms,training and quality control should be strengthened.CPAs should improve their professional cautiousness,especially the proper audit procedures selected.