Case Analysis Of Audit Failure Of Company X By A Accounting Firm

In recent years,auditing failures of accounting firms have occurred frequently,which has gradually become a social focus.In order to get more benefits and help companies integrate more assets,the listed companies spare no effort to make financial fraud and fabricate profits.As a result,the whitewashed financial report covers the eyes of investors and changes from carefully selected companies with promising prospects to "blindfolded" investments,which breaks the stability of the economic market and damages the credibility of listed companies and the Securities Regulatory Commission.The interests of large and small investors.This is not only the problem of the listed companies that falsify accounting information,but also the accountant firms that issue unqualified audit reports for the listed companies are bound to bear the responsibility for the corresponding audit failure.It is the accountant firms that contribute to the smooth listing of the companies,the chaos of the national market economy and the loss of investors that cannot be shirked.Therefore,in order to comprehensively analyze the causes of audit failure,starting from the third-party auditing units,this paper discusses the causes of audit failure through accounting firms and certified public accountants,and puts forward practical solutions,with the aim of reducing the occurrence of similar audit failure events.This paper chooses the audit failure cases of A accounting firm to X company as follows: X company is the first listed company on GEM,and A accounting firm has audited it for 9 years,maintaining a long-term partnership.On the premise of fully understanding the financial situation of the audited unit,there still exists the fact of audit failure.Obviously,when the audit process is going on,There are many loopholes on one side of audit subject.In November 2017,the SFC issued penalty notices to A Accounting Firm and X Company respectively.Because A Accounting Firm did not audit the facts of financial fraud in the audit of X Company's financial statements in 2014,it gave an unqualified opinion audit report.Later,the SFC found that A Accounting Firm was negligent in its work,X Company's financial fraud was not disclosed,and the media reported the aftermath.The more intense,the whole process of financial fraud cases has been exposed.Because of the relatively large amount of fraud and hidden fraud in recent years,it can be studied as a typical case in the analysis of audit failure.Through literature analysis,case analysis and inductive research methods,this paper makes a thorough study of audit failure cases of accounting firms in order to put forward problems,analyze problems,solve problems,and put forward suggestions.The first part introduces the basic concepts related to audit failure,and then introduces that the article focuses on the research of audit failure.Through the research of domestic and foreign literatures,this paper analyses the current situation of dealing with audit failure events in China.Using case study method,this paper analyses the causes of audit failure of accounting firm A through the case of audit failure of company X by accounting firm A,and puts forward solutions and suggestions through accounting firm A and CPA respectively,so as to ensure the improvement of audit quality and help purify the capitalized market enviroment.