Research On Causes And Countermeasures Of The Failure Of Confirmations Of Accounting Firms

Confirmation is a key procedure which CPA can get auditing evidences from the third party outside.The obtained audit evidence is more powerful and reliable,and can provide audit evidence for the identification of multiple accounts and transactions,which is of great significance for the evaluation of audit project practice quality and audit institution practice level.Whether the confirmation procedure is reasonable or not will affect the overall arrangement of the audit,which will affect the audit conclusion and even the success or failure of the audit.However,in recent years,audit failures caused by improper confirmation procedures occur frequently.In 2018,the China securities regulatory commission conducted a special inspection on the confirmation procedures in the audit work,and found that the execution of the confirmation procedures by accounting firms was not optimistic,and there were many cases that led to the audit failure,which had to attract our attention.Therefore,it is of great significance to analyze the problems existing in the certification process of the accounting firm,summarize the reasons behind the problems,and finally put forward corresponding suggestions to improve the certification quality of the accounting firm so as to improve the audit quality and promote the smooth and healthy operation of the audit industry.Through the methods of literature research,case study and statistical analysis,this paper combines relevant theories with practical cases to study and analyze the three consecutive years of failure in confirmation in REANDA accounting firm.Through the study of this case,it can be seen that the main problems existing in the certification process of REANDA include the following aspects: incomplete certification object,failure to maintain control over the issuance process,and auditors' failure to maintain professional suspicion box to strictly execute the substitution test.The internal reasons for the frequent occurrence of certification problems in REANDA are as follows: the certified public accountants failed to comply with the code of practice to carry out certification procedures;REANDA's internal management and quality control system is not perfect enough to further control the quality of certification.The external reason is that the competition is too intense and the punishment imposed by the regulators is too severe and not timely,which will lead to the repeated confirmation failure of REANDA.Therefore,this paper believesthat REANDA should improve the control of certified public accountants on the process of certification and strengthen the quality of certification supervision and audit;At the same time,the regulators should also improve the defects and deficiencies in the certification procedures to improve the certification supervision mechanism,so as to standardize the certification procedures of accounting firms,improve the existing problems in the certification procedures to a greater extent,and thereby improve the audit quality and reduce the audit risk.The accounting firm shall implement the certification procedure in strict accordance with the standards in the auditing process and avoid damaging the reputation of the firm due to the audit failure caused by improper certification.This paper carries out a detailed analysis of REANDA,on the one hand,it can help REANDA solve the problems existing in the certification process from the two aspects of the firm itself and the certified public accountant,so as to avoid the recurrence of the certification problem.At the same time,the study of this case can also provide reference for other firms to improve the audit certification work.