Research On CPA Audit Failures

With the continuous maturity of China's capital market,In recent years,the frequent occurrence of audit failure cases such as Green Earth,Wanfushengke and Kelon Electrical Appliances has had a great negative impact on the healthy development of the audit industry and the stable operation of the capital market,resulting in public distrust of CPAs.Therefore,this paper combines the case of Xintai Electric Audit Failure,probes into the problem of CPA Audit Failure,finds out the main causes of CPA Audit Failure,and puts forward countermeasures to help CPA improve audit quality.In order to deepen the understanding of CPA audit failure,this paper introduces related concepts,analyses the impact of audit failure from the perspectives of investors,auditees,CPA firms and CPAs,and outlines the theoretical basis of the existence of audit in development.Afterwards,the paper summarizes and collates the announcement of punishment for audit failure cases issued by the SFC from 2012 to 2018,summarizes the basic situation of CPA audit failure cases in China in recent years,analyses the causes of these cases,and carries out specific analysis combined with Xintai Electric case.this paper argues that the reasons for the audit failure of Beijing Xinghua Accounting Firm in Xintai Electric Case mainly come from three aspects.Firstly,the CPA has not maintained the proper professional skepticism,the professional quality is not high,and the business management is not in place.Secondly,Xintai Electric Information Disclosure is not standardized,management malicious fraud accounts,internal control system is not perfect.Finally,there are competition incentives in the auditing industry,light punishment from the government,and insufficient supervision of the industry.Finally,according to the above situation,this paper puts forward some countermeasures and suggestions to prevent CPA audit failure:Improve the overall quality of CPAs,improve the auditing industry supervision system;improve the internal control system of enterprises,strictly control the quality of accounting work;increase supervision and crackdown,and create a good competitive environment.The main contribution of this paper is to reduce the possibility of audit failure,and to improve auditing.Quality provides guidance.