Analysis On The Problem And Optimization Of The Confirmation Based On Professional Skepticism

The purpose of the audit is to verify the authenticity of the information in the company’s financial statements,so as to increase the trust of the intended users of the financial statements in the company’s financial statements.It can be said that the audit process is the process of continuously obtaining audit evidence.As one of the seven basic audit procedures,the confirmation procedure can directly obtain external audit evidence from a third party for the auditor.The evidence obtained is more reliable and has stronger proving power,which plays a decisive role in the entire audit work.However,it can be seen from the penalties of the China Securities Regulatory Commission in the past few years that accounting firms and certified public accountants have been punished repeatedly,and the improper implementation of the confirmation procedure is one of the most common reason for the audit failures.Moreover,looking at the cases of audit failures caused by the letter of evidence procedures in recent years,we can find that the failure of the confirmation procedures is to a large extent closely related to the lack of professional skepticism of the CPA.For example,the CPA failed to objectively evaluate the management and governance to make unreasonable and appropriate decision-making on corroboration,or failed to remain vigilant about the doubts caused by the abnormal response,and failed to objectively and prudently evaluate the received inquiries and response rates.These situation where are both lack of professional skepticism that make the confirmation procedures invalid,and fail to obtain audit evidence to meet expectations and identify major misstatements and fraud risks in a timely manner,which ultimately leads to audit failure.This article selects Zhongxingcai Guanghua Certified Public Accountants to conduct a case analysis of the failure of the 2015 annual report audit of Xinlv Co.,Ltd.,combines the selected cases and the penalty announcements of the China Securities Regulatory Commission in recent years,and uses case analysis and data analysis to carry out the study on the confirmation procedures.The purpose of the research is to analyze and study the problems in the implementation of the confirmation procedures based on the perspective of professional skepticism and to explore the reasons behind the problems to propose optimization suggestions for the confirmation procedures.First,this article introduces the background and significance of the research,clarifies the analysis logic of this article,and builds the research framework of this case.Secondly,it is the theoretical basis and literature review,expounding the related concepts and theories of"confirmation procedure" and "professional skepticism",and through reading the literature to understand and sort out the relevant domestics and international research results and development status of audit failures,audit evidence,professional skepticism,and audit confirmations.Then,this article collects and sorts out the administrative penalty decisions of the China Securities Regulatory Commission from 2016 to 2020,and summarizes the problems that are prone to occur in the implementation of domestics confirmation procedures,and the reasons for these problems.Afterwards,I selected the case of Zhongxingcai auditing Xinlv,based on the perspective of lack of professional skepticism,conducted a specific analysis of the problems in the confirmation procedures,and deeply analyzed the reasons for the problems.Finally,in view of the problems and reasons in the above-mentioned confirmation procedures,reasonable suggestions for improvement are put forward.Based on the perspective of lack of professional skepticism,this article conducts corresponding research on the problems and optimization suggestions of confirmation procedure.Taking Zhongxingcai auditing Xinlv as an example,it specifically analyzes the performance and reasons of the lack of professional skepticism during the implementation of confirmation procedure.This will provide a new research perspective and direction for the subsequent research on the related issues of confirmation procedure,and also emphasize the importance of confirmation procedure in the entire audit procedure and the signification of maintaining professional skepticism during the confirmation procedures.