Cause Analysis And Countermeasure Research On Audit Failure Of Chinese Accounting Firms

Auditing of accounting firms plays an important role in social and economic development.However,Chinese accounting firms and certified public accountants frequently receive administrative punishment from the CSRC,which makes the integrity on which the certified public accountants industry depends questionable.It is urgent to improve the auditing quality,reduce auditing failures and enhance public credibility.Therefore,it is necessary to study the causes of auditing failures of accounting firms and the preventive measures.Because of the above,the research problem of this paper is "the causes and countermeasures of audit failures of accounting firms in our country" using case analysis,comparative research,induction and deduction methods and other research methods to sort out the overall situation of audit failures of accounting firms in our country in the past 20 years,it also analyzes and studies the causes of audit failures and preventive countermeasures from various angles for the audit failures that BDO China SHU LUN PAN Certified Public Accountants LLP,one of the eight largest accounting firms in our country,has been subject to administrative punishment by China securities regulatory Commission every year from 2016 to 2018.The study of this article main finds:(1)The audit failure of BDO China SHU LUN PAN Certified Public Accountants LLP is costly with serious consequences,strong market response,and a large number of customer losses,resulting in serious negative impacts.(2)The main reasons for BDO China SHU LUN PAN Certified Public Accountants LLP are:the quality control system of BDO China SHU LUN PAN Certified Public Accountants LLP is not perfect and its independence is lacking;Improper design and implementation of audit procedures,insufficient professional competence,failure to maintain reasonable professional suspicion and diligence in the audit process;the audited entity has financial fraud and the internal governance mechanism is unreasonable;Chinese supervision and punishment of the audit industry are not strong enough and the cross-supervision mode is unreasonable;it is the above adverse factors,especially the long-standing problems in regulatory environment and by itself,that have led to the continuous audit failure of BDO China SHU LUN PAN Certified Public Accountants LLP.(3)Countermeasures and suggestions for audit failure:accounting firms should strengthen internal governance,perfect audit quality control system,perfect assessment incentive system,strengthen training for regular employees and interns,strictly implement audit procedures,enhance professional competence,emphasize professional skepticism,and strengthen auditors' awareness of risk prevention;To strengthen internal control,prevent financial fraud,optimize the governance structure and improve the governance mechanism from the perspective of the audited entity;We will integrate regulatory resources,strengthen supervision,improve the audit fee system,strengthen the management of audit fees,improve the audit quality evaluation index system,strengthen self-discipline management in the industry,strengthen the management of audit titles,and improve the construction of audit staff.The main innovations of this paper are as follows:(1)This paper analyzes the causes of audit failure of the accounting firm of Antares from the perspectives of the accounting firm and its auditors,the audited entity and the regulatory environment,and puts forward relevant countermeasures from the corresponding perspective,which will enrich and perfect the analysis perspective;(2)In the cause analysis part,by explaining the contents of the latest draft of the fifth revision of the securities law,it is found that the current law is not strict enough and this perspective provides a new way of analysis;this paper suggests that from the perspective of auditing title management,it provides a new idea for the relevant regulators to strengthen auditor management;the recommendations for auditor training are divided into two angles:formal employees and interns,which are more detailed and in-depth.The research value of this article:The conclusion of this paper provides inspiration to the relevant parties that cause frequent audit failures of accounting firms in China,which will help to improve audit quality and reduce the number of audit failures.