On The Improvement Of Confirmation Procedure Of Reanda

Confirmation procedure is one of the seven major audit procedures.It can provide strong audit evidences in audit activities.If this procedure can be fully implemented,the effect of audit can be better and work efficiency be further improved.In all kinds of audit failures,the confirmation procedure appears quite frequently.According to statistics,since 2010,the CSRC has imposed a total of 26 penalties on accounting firms and certified public accountants,including 12 cases of missing letters,11 cases of missing substitution tests,8 cases of abnormal responses and 7 cases of missing control of sending confirmations.In 2018,three accounting firms have received notifications of administrative penalties from the CSRC.Among them,Zhongtianyun and Lixin have many problems in the process of implementing the confirmation procedure.It can be seen that the confirmation procedure has not been well implemented,and it plays an important role in audit failures,which is often used by financial fraudsters.Reanda is a large-scale accounting firm in China.All stakeholders are concerned about the audit quality of Reanda.However,since 2010,Reanda has received a number of notifications of administrative penalties from the China securities Regulatory Commission,which lists various illegal facts in the audit procedures carried out by Reanda,among which there are many problems in the confirmation procedure.Reanda Accounting Firm acted as an auditor in the back door listing of Jiuhao Group.In the process of auditing,it failed to implement the letter audit procedure and received a notice of administrative penalty from the CSRC.In order to satisfy all standards for back-door listing,Jiuhao Group presented a “brilliant” performance.Its employees concealed the pledge status of false repayment corresponding to false business.If the pledge can be exposed,the fraudulent reorganization is likely to be exposed in its entirety.However,in the face of not receiving the response letter for a confirmation of 300 million yuan of bank deposits,Reanda did not take further audit procedures,and issued an unqualified opinion.In an era of science and technology,there are many obvious defects in the use of papery letters.At present,domestic bank confirmations and replies are almost all papery and handled by hand.During the process,confirmation letters are handle by many people,such as CPA,employees from auditee,bank staff and express companies,etc.It is difficult to control the process,guarantee the quality of replies.In Britain,America and Taiwan,there are already mature experience in the construction of confirmation centers,which can provide a variety of confirmation services,including bank confirmation.It is worthy for reference.Additionaly,Reanda did not abide by sample rules and lose effective control for confirmation letters.This paper mainly analyses the unreasonable parts of the confirmation procedure of Reanda,summarizes the problems and puts forward relevant policy suggestions,hoping to effectively improve work efficiency,further reduce risks,exploit the supervision function of audit,maintain the order of capital market and protect all stakeholders.This paper needs more relevant data and information to provide a better analysis and I will work harder in the future to improve it.