Research On The Disclosure By The CPA Of The Illegal Activities Of The Auditee

In recent years,financial fraud cases investigated and dealt with by China securities regulatory commission have been increasing,and enterprises may hide other illegal behaviors behind financial fraud.The disclosure of illegal behaviors by certified public accountants is an issue worthy of attention.Therefore,this paper makes further research on this issue from multiple perspectives.This paper collects and sorts out the literature on the audit responsibility and social responsibility of certified public accountants,and sorts out the relevant theoretical basis and institutional background.On this basis,a questionnaire survey was conducted for experts and scholars on the disclosure of illegal behaviors of the audited units by certified public accountants.Based on the results of the questionnaire,the expectations and opinions of experts and scholars on the disclosure of illegal behaviors by certified public accountants of the audited units were analyzed.Finally,relevant conclusions were drawn and Suggestions were put forward.According to the result of questionnaire survey,this article from "whether to expose" "how to reveal" the "should be focused on offence" "influence factors of certified public accountants expose illegal auditees" "don't reveal audit risk" "reveals the importance of illegal ACTS to assist regulatory and practical utility" etc.Analysis of the certified public accountant for infringement of the auditees reveal problems.On the issue of "whether to disclose",most experts and scholars believe that certified public accountants should pay attention to this matter,and communicate with the auditees and dissuade them.On the issue of "how to disclose",most experts and scholars believe that certified public accountants should disclose the illegal behaviors related to material misstatement in the audit report of financial statements.In the opinion of experts and scholars,it is not a necessary choice to report to the relevant departments;Experts and scholars have different opinions on whether the CPA should terminate the contract if the communication fails and whether the illegal behavior should be disclosed in the internal control audit report.In the aspect of "illegal behaviors that should be focused on",experts and scholars believe that the CPA should first pay attention to illegal behaviors involving fraud,corruption and bribery.In addition,they also need to pay attention to illegal behaviors in the fields of money laundering,financing of terrorism and criminal proceeds,as well as securities market and trading.In terms of "factors that affect thedisclosure of illegal behaviors by certified public accountants",most experts and scholars believe that the most important influencing factors are laws and regulations,followed by auditing standards,engagement letters and confidentiality agreements,and constraints of professional ethics.In terms of "audit risks not disclosed",when the CPA fails to explain the illegal behaviors of the enterprise in the audit report and fails to report such behaviors to the regulatory agency,most experts and scholars believe that the CPA is likely to bear legal liabilities.Most experts and scholars believe that certified public accountants are very important to assist supervision,but their practical effect is limited.This paper finds that the opinions of experts and scholars are quite different on the ways that certified public accountants should deal with the illegal behaviors of the auditees.Experts and scholars believe that there are audit risks when certified public accountants fail to disclose the illegal behaviors of the auditees,and certified public accountants fail to give full play to their effectiveness in assisting supervision.Based on the expectations and opinions of scholars,this paper puts forward the prospect from the perspective of legislation and industry.