Case Study On The Audit Failure Of Zhonghua Accounting Firm To Ningbo Sunlight

Since the restoration of the certified public accountant system in my country in the early 1980s,the system has existed for more than 40 years.Although the system has been continuously improved for decades,audit failure cases still occur from time to time.The occurrence of audit failures not only caused a great negative impact on accounting firms and certified public accountants,but also caused irreparable losses for investors and interfered with the smooth operation of the securities market.Faced with such a situation,it is particularly important to analyze the causes of audit failures and propose measures to prevent audit failures.On the basis of reviewing the relevant literature of domestic and foreign scholars,this paper selects the case on the audit failure of Zhonghua accounting firm to Ningbo Sunlight as research object and studies the problem of the audit failure of certified public accountants from the perspective of accounting firms and certified public accountants,taking the principal-agent theory,audit risk-oriented theory and information asymmetry theory as the theoretical foundation,adopting the literature research method and case research method.The research result shows that Zhonghua accounting firm had the following problems in the annual audit of Ningbo Sunlight: first,it did not identify the special risks caused by fraud;second,it did not maintain professional suspicion of abnormalities in the current accounts;third,sufficient and appropriate audit evidence has not been obtained;fourth,effective quality control procedures have not been implemented.Analyzing the above-mentioned problems,it is concluded that the reasons leading to the audit failure of Zhonghua accounting firm to Ningbo Sunlight mainly include the following: first,the risk assessment procedure is not implemented in place;second,improper trust in the auditee;third,the understanding of the adequacy of audit evidence is inaccurate;fourth,the quality control system is imperfect and the awareness of quality control is weak.Regarding the above reasons for audit failure,this article puts forward the following targeted suggestions: first,strengthen the implementation of risk assessment procedures;second,avoid excessive trust in the auditee;third,improve the adequacy and appropriateness of audit evidence fourth,improve the quality control system and enhance the awareness of quality control.