Case Study On Audit Failure Of Jia Dian Shares Based On Risk Orientation

With the increasing complexity of economic business,the audit mode is constantly changing and updating.The audit mode of our country has experienced account-oriented audit,system-oriented audit and traditional risk-oriented audit.At present,the modern risk-oriented audit mode is widely used.In recent years,financial fraud events occur frequently,most of which are accompanied by audit failure,resulting in the public trust in the audit industry reduced.In this context,this paper studies a large number of domestic and foreign relevant literature,combined with their own theoretical knowledge,case study on the application of risk-oriented,and analyzes how to better use risk-oriented audit mode in practice to prevent audit failure.This paper takes Jia Dian Shares audit failure case as the research object,combined with risk-oriented audit process,analyzes the problems of Dahua Certified Public Accountants in each stage of audit process.First of all,Dahua did not pay attention to the possible lack of management integrity behind the repeated financial restatements of Jia Dian Shares,as well as the fraud motivation under the pressure of gambling agreement after the company's major asset restructuring.Blindly undertaking the audit business may bring potential audit risks.Secondly,it analyzes the strategic risks of Jiadian from four aspects: macro environment,industry environment,business model and internal environment,The operation risks of shares is analyzed from four aspects of supply chain,production,sales and internal control.Through the evaluation of strategic risk and operational risk of Jia Dian Shares,the inadequacy of Dahua's major misstatement risk evaluation stage is identified.Furthermore,through the analysis,we find that Dahua has some inspection risks,such as lack of independence under continuous audit,insufficient professional prudence and doubt,and inadequate competence of auditors;in addition,the risk response phase is mainly control test and substantive test,while Dahua based on the excessive trust in Jia Dian Shares has not strictly implemented the control test and the importance level has not been corrected in time,and there are also insufficient analytical procedures,insufficient detailed test,and sampling in the substantive test link Finally,at the audit completion stage,Dahua did not reasonably evaluate the misstatements found in the early stage and required the management to correct them in time,and the inadequate quality control review brought high audit risk.At the end of this paper,combined with the previous analysis and the actual situation summary of the case enlightenment,for the accounting firm in each audit business stage to prevent audit failure to provide recommendations.Based on the case analysis,this paper can be used for reference by accounting firms and certified public accountants to promote the better development of riskoriented audit in China.