Research On The Reasons Of Audit Failure Under Government-enterprise Collusion

China currently requires not only the speed of economic development,but also the quality of its development.However,due to the influence of market economy system,enterprise competition is becoming increasingly fierce,which makes some listed companies financial fraud due to performance pressure,to a certain extent,undermines the stability of the market economy order,and has a negative impact on the high-quality development of China’s capital market.At the same time,there is strong protectionism in some parts of China.In order to prevent the adverse impact of the delisting of listed companies due to poor performance on their completion of GDP performance indicators,local governments are likely to collude with them for financial fraud,which not only reduces the reliability of corporate financial reporting information,but also damages the credibility of the government to some extent,and has a negative impact on the smooth and healthy operation of China’s capital market.It is a stumbling block on the road of building a pro-Qing government-enterprise relationship in China.In this context,the majority of investors have higher and higher requirements for the audit quality of accounting firms as third-party supervisors,and require certified public accountants as gatekeepers of the capital market to effectively prevent enterprises that do not meet the standards from covering up their real financial situation through financial fraud and ensure the healthy and stable operation of the economy.The collusion between local listed companies and the government for financial fraud is more hidden than the traditional means of fraud,which is difficult to arouse the vigilance of certified public accountants and add further audit procedures.Therefore,the certified public accountants who audit the financial statements are prone to make inappropriate audit opinions wrongly,resulting in audit failure.And incorrect audit reports will not only cause loss of interests to investors who rely on them to make investment decisions,reduce the efficiency of capital market allocation,but also make people doubt the professional competence and professional ethics of CPA,and even reduce the credibility of CPA industry as a social and economic supervisor,affecting the order of social and economic operation.Based on this,this paper relies on the case analysis method,uses the rent-seeking theory,information asymmetry theory and audit conflict theory,and applies the theoretical research into the case analysis of audit failure of Zhonghua accounting firm on Saint Ledda and the government collusion.This paper introduces the research background,significance and the research results of Chinese and foreign scholars,systematically expounds the views of some famous experts and scholars at home and abroad,explains the concepts of government-enterprise collusion and audit failure,summarizes the theoretical basis of audit failure caused by government-enterprise collusion,analyzes in detail the main means of financial fraud by Saint Ledda and the government collusion and the specific performance of audit failure by Zhonghua,and selects multiple perspectives to explain and analyze the underlying causes of audit failure in this case.It is believed that CPA should not blindly trust government documents,and maintain professional suspicion to avoid the audit risk caused by government-enterprise collusion.The author hopes that this paper can make a little contribution to the theoretical study of audit failure,and explore how social audit,as an important supervision mechanism in the capital market supervision system,can better play its role.It can effectively supervise the collusion fraud of local governments and listed companies,improve the quality of China’s CPA audit,purify the audit industry,reshape the confidence of investors,optimize China’s business environment,and contribute its own strength to build a credit and fair investment environment.