The Study On Audit Failure Of Zhongxingcai Guanghua Accounting Firm In The Case Of Xinlv Stocks

Since the reform and opening up,our country’s capital market has been prosperous and developed.The financial status and business performance of listed companies are the focus of investors.As the carrier of this information,audit reports have become an important reference and basis for investors to make investment decisions.In recent years,there have been frequent cases of audit failures.Some companies have used financial fraud to whitewash their financial statements for their own interests,and have not faithfully reflected the true financial status of the company.However,the accounting firm that conducted the audit also failed to detect the financial fraud of the enterprise,and the audit supervision function was ineffective,and issued audit opinions and reports that were inconsistent with the real financial status of the enterprise.The occurrence of audit failures undermines the credibility of the audit industry,affects the vital interests of the majority of investors,and hinders the healthy and orderly development of the capital market.In order to maintain the authority of auditing,give full play to the role of auditing supervision,and standardize the development order of the capital market,it is necessary to comprehensively analyze the causes of auditing failures,and take targeted measures to prevent auditing failures.Through the study of the audit failure cases of Xinlv Stocks,this thesis expounds the reasons for the audit failure of Zhongxing Cai Guanghua Accounting Firm and proposes effective countermeasures.Help certified accountants learn lessons from audit failures,build risk awareness,comprehensively analyze and consider various problems in the audit process,and provide improvement measures and suggestions for future audit work of accounting firms,so as to avoid audit failures.By analyzing the specific process of the audit failure of Xinlv Stocks and the reasons of all parties,this thesis puts forward the enlightenment and measures to prevent audit failure in a targeted manner.This thesis specifically discusses and studies from the following five parts:The first part of the introduction first expounds the research background of this thesis,and then puts forward the research significance of the thesis from the theoretical and practical perspectives.research content and research methods.The second part elaborates the relevant theoretical basis of audit failure,including the definition and performance of audit failure,the reasons for audit failure and the impact of audit failure.Four important theoretical foundations,such as principal-agent theory and information asymmetry theory,are introduced.In the third part,Zhongxing Caiguanghua Certified Public Accountants analyzes the case of Xinlv Stocks audit failure,and uses the modern risk-oriented concept to analyze the problems in Xinlv Stocks audit process from the aspects of material misstatement risk and inspection risk.It focuses on the analysis of audit risks from the aspects of external environment,internal control environment,related party transaction risks,risk assessment,detail testing and professional doubts of auditors.And expounded the results of the audit failure and the impact on the firm and Xinlv Stocks.The fourth part focuses on analyzing the main reasons for the failure of Xinlv Stocks audit,the auditors have insufficient competence,lack of professional ethics,improper implementation of audit procedures,lack of professional doubt and prudence,failure to be diligent and responsible.For the accounting firm,there are reasons such as insufficient preparation before undertaking business,lax audit quality control,and unsound training system of the firm.From the perspective of Xinlv Stocks,there are reasons for fraudulent motives in the gambling agreement,major defects in internal control,falsification of financial data,and false disclosures.From the perspective of the external environment,it includes reasons such as poor audit practice environment and low cost of corporate violations.The fifth part puts forward countermeasures to prevent audit failures according to the four reasons of audit failure: firstly,certified public accountants should strengthen their studies,improve their professional competence,and strictly implement auditing procedures in the auditing process to maintain a high degree of professional suspicion;It is the accounting firm that should carefully evaluate the risks of undertaking business and strictly control the audit quality and audit process;the third is to establish and improve the internal control system of the audited company,strengthen the internal management of the company,and improve the company’s shareholding structure;Illegal costs of large firms.