Study On The Failure Of Ruihua On The Audit Of Zhenlong Specialty IPO

Since the reform of shareholding division in the 2005,China's capital market,especially the stock market,has played an increasingly significant role in optimizing the allocation of market resources,investment and financing of enterprises and individuals,including other profit-making institutions,and plays a very important role in improving corporate governance.At the same time brought about by the increasing number of listed companies,the scale of listed enterprises continue to expand.The IPO(Initial public offerings)has become one of the important measures for many enterprises to raise funds and expand the existing scale of enterprises.However,based on the drive of economic interests and the temptation of the expected future prospects,there are some enterprises that do not qualify as listed companies,using a series of counterfeiting means to achieve the goal of listing.CPA plays an important role as one of the participants in the initial public offering of enterprises.CPA is required to audit the financial statements of the enterprises preparing for the initial public offering and to audit whether they meet the relevant listing standards in order to protect the rights and economic interests of many stock market investors from loss.As we all know,IPO audit is different from the general audit of enterprises,it can be said that its workload and work environment complexity is far greater than the general audit of enterprises.This makes it objectively more difficult for CPA to audit,so that CPA can find that the financial fraud of public offering issuers is less controllable,and finally issued unreasonable audit reports,increasing the audit risk.Based on this,this article takes the 2017 years disclosed by the SFC Ruihua to Liaoning Zhenlong specialty IPO Audit failure case as the entry point,combined with the theoretical research of the relevant audit failure at home and abroad,based on the principal agent theory,Human nature hypothesis theory,fraud iceberg theory,This paper analyzes the IPO audit of the unit from the risk assessment stage to the review stage,and analyzes the problems existing in the audit process and the reasons that lead to the audit failure from multiple levels.Finally,from the audit procedure,the accounting firm pointed out the problems existing in the audit subject level,explained the major mistakes in the audit procedures,the firm to undertake business to understand the company is not enough,and the quality control system of accounting firms to be further optimized,and ultimately led to the emergence of audit failure.On the basis of the conclusion of this study,this paper puts forward some ideas on perfecting the IPO audit process,prompting the auditor firm to strengthen the management of CPA and improving the quality of audit report.This paper puts forward some suggestions on attaching importance to the training and selection of CPA,enhancing the independence of CPA and strengthening the internal management of accounting firm.The aim is to perfect the IPO audit process,reduce the audit risk and improve the efficiency and effect of the audit work,in order to provide relevant reference for the follow-up research work in this field.