A Case Study On Audit Failure Of JD Share By Dahua Accounting Firm

Nowadays,with the rapid development of China’s economy,but the market supervision is still not in place,the shortage of the capital market is exposed more and more.There are more and more financial fraud incidents,many companies choose to modify financial information to whitewash Taiping.The accuracy and timeliness of CPA audit become particularly important.Reasonable and reliable audit report can provide more reliable information for investors’ decision-making.But in recent years,financial fraud events occur frequently,such as Asia Pacific industry,Jiuhao group and so on.The adverse consequences of these events not only bring huge loss of interests to investors,but also cause serious damage to the healthy development of the audit industry.Therefore,it is of great practical significance to explore the causes of audit failure and put forward targeted suggestions.The theoretical basis of this paper is information asymmetry theory,principal-agent theory and rational broker theory.Taking Dahua firm’s audit failure of JD shares as the research object,this paper analyzes the causes of audit failure and puts forward the corresponding enlightenment.First of all,this paper introduces the research background and significance,expounds the frequent fraud events in recent years,and the credibility of the audit industry has been questioned,so it is urgent to improve the audit quality and prevent audit failure.The second part introduces the concept of audit failure,information asymmetry theory,principal-agent theory and rational broker theory,which are used in this paper to pave the way for the follow-up research.The third part is the review of audit failure cases of JD shares by Dahua firm,to understand the company’s situation and audit case process.The fourth part is the specific analysis of audit failure cases,from the awareness of auditors,the independence of the firm,audit procedures and quality control system to analyze why the audit failed.The fifth part draws the corresponding enlightenment,hoping that the firm can reduce unnecessary errors in the future audit work and prevent audit failure.The last part is the conclusion and prospect.It is expected that the audit industry will enhance its credibility and continue to develop steadily.In the face of the gradual decline in credibility,Dahua accounting firm should actively respond,try to find their own shortcomings and make corresponding improvement measures to get rid of the current predicament.Dahua accounting firm only from its own change,in order to establish an advantage in the fierce market competition,strengthen the control level of audit quality,reduce the risk of audit failure,prevent audit failure,improve its competitiveness,and constantly accumulate customer reputation,so as to continuously enhance the credibility and long-term development in the future.This also has certain reference significance for other firms.