Study On The Failure Of Audit Basis On The Conflict Theory

In the recent period,the number of financial frauds of listed companies has gradually increased.CPAs and accounting firms have often been subject to administrative penalties by the CSRC due to audit failures.Audit failures are closely related to corporate financial fraud.In recent years,incidents of audit failures caused by corporate financial fraud,such as “Jinya Technology Fraud”,“Kunming Machine Tool Fraud”,and “Xintai Electric Fraudulent Issuance” have had a serious impact on listed companies.This makes the stakeholders have to consider whether there is a deeper reason for audit failure.This paper starts from the theory of audit conflict,analyzes the causes of audit failure through the process of audit business development of the audited units and accounting firms.First of all,from the perspective of audit subject and audit object,based on the data in the decision of administrative penalty of China Securities Regulatory Commission(2010-2018),using data statistics to analyze the current situation of audit failure,and then considering the pressure imposed by the management authorities and the pressure of auditor resistance to build an audit conflict model for the analysis of audit failure.Finally,game analysis of various factors is carried out To provide theoretical support for case study.Next,we select the financial fraud cases of Erkang pharmaceutical,which made a great impact in 2017,and apply the auditconflict model to analyze the specific audit conflict and audit failure.Through the audit conflict model,we can find that the key to prevent audit failure is the restriction of financial fraud and the power driving of auditor's normal audit.