Research On Auditing Failure Of Accounting Firms

In the wake of the substained development and improvement of Chinese capital market,investors have gradually accepted the separation of the company's operating rights and ownership.Auditing by certified public accountants has undoubtedly become a trusted choice for investors.The audited verification information is an investment made by investors.An important basis for decision-making.At the same time,the CPA audit is also escorting the sound and orderly development of the capital market.As an integral part of the capital market,CPA audits have made great contributions to the healthy operation of the market economic control mechanism,improved the operational efficiency of the market control mechanism,ensured the long-term balanced operation of the capital market,and received praise from all sectors of society With praise.However,in recent years,the number of accounting firms that have suffered penalties due to the occurrence of audit failure cases has shown an upward trend in China as a whole,and the gap between the economic oversight role of auditing and the expectations of the general public has gradually increased.The negative impact of audit failure far exceeds people's imagination.Not only will it damage the audit industry itself,it will lead to a decline in trust in the regulatory authorities,and it will even cause a block in the development of the capital market.Improving the audit quality of CPA audits and strengthening the core competence of the audit industry is the only way to avoid audit failures.This article first explains the basic concepts and theories of audit failure,introduces the status and specific performance of audit failure in China,and analyzes the causes,characteristics and different impacts of audit failure on various parties.Then it introduced the case of Reanda Certified Public Accountants failing to audit Jiuhao Group,and introduced the basic situation of Reanda Certified Public Accountants and the audited unit Jiuhao Group.Then analyzed the fraud motivations and fraud methods of Jiuhao Group in this case,and sorted out the errors that violated the audit standards in the process of auditing Jiuhao Group by the general auditing procedures,which will lead to errors.The reasons are categorized into three aspects: lack of a good external environment,flaws in the internal management of the firm and CPAs lack the professional competence they deserve,fraud motives within the company,and failure of internal control.A comprehensive analysis of how these three causes led to the failure of the audit.External supervision and management mechanism,strengthen public opinion supervision;improve the establishment of the firm's salary incentive mechanism and internal quality control system;improve the audit unit's moral bottom line,strengthen the audit unit's internal control construction and strengthen the training of composite audit talents and other corresponding improvement suggestions.This paper discusses the failure cases of Reanda auditing Jiuhao Group,analyzes the fraud process of Jiuhao Group in a multi-level and perspective,studies the reasons for the failure of Reanda auditing firm,and puts forward corresponding suggestions to fill China A systematic and comprehensive study on the vacancy of related case studies on audit failures of companies relying on the Internet platform,and the case in which the Securities Regulatory Commission has imposed the highest administrative fine in the history-Reanda Certified Public Accountants failed to audit Other accounting firms provided lessons and references for reducing the risk of audit failure.