A Case Study Of Audit Failure Based On Professional Skepticism

With the continuous development of China’s market economy,listed companies have an increasingly important impact on China’s economy.In the capital market,accounting firms,as independent third-party institutions,audit the annual financial statements of listed companies and play an important role in supervision and verification.However,in recent years,there have been many cases of financial fraud of listed companies and audit failure of accounting firms,which not only caused serious losses to investors and creditors,but also damaged the independence of accounting firms and the professionalism of certified public accountants.There are various reasons for the failure of audit.On the one hand,it is mostly related to the careful fraud of the audited unit,and on the other hand,it is also related to the failure of the auditors to perform their duties diligently.According to the provisions of the auditing standards,auditors should be highly alert to possible misstatements and maintain professional suspicion during the audit process.However,it is undeniable that in the actual audit practice,there are still many auditors and even certified public accountants who lack the understanding of audit suspicion,lack the understanding of audit suspicion,and are difficult to maintain sufficient professional suspicion.Therefore,based on the perspective of professional skepticism,this paper analyzes the causes of audit failure and puts forward corresponding countermeasures and suggestions.This paper combines theoretical research with specific case analysis and studies the audit failure cases of YT accounting firm auditing KR Company from the perspective of professional suspicion.On the basis of collecting and sorting out relevant domestic and foreign literature,this paper clearly distinguishes the concepts of professional suspicion,audit failure and the relationship between professional suspicion and audit failure,such as information asymmetry theory,fraud diamond theory As the theoretical basis of this paper,the risk-oriented audit theory and principal-agent theory,combined with specific audit failure cases,analyzed and studied the process of YT accounting firm’s audit of KR Company,analyzed the performance and consequences of auditors’ audit suspicion in the practice process,and summarized the reasons for audit failure.At the same time,the problems in YT’s audit work include improper design and implementation of audit procedures,lack of professional suspicion,lack of professional competence,low-price competition and quality control system problems.Finally,it is concluded that the main reason for the failure of this audit is that the auditors failed to maintain sufficient professional suspicion.Finally,from the perspective of professional skepticism,it puts forward relevant countermeasures and suggestions to promote the maintenance of professional skepticism,improve audit quality and avoid audit failure.Through the study of audit failure cases based on professional skepticism in this paper,we can promote auditors to maintain appropriate professional skepticism in the course of practice,improve the quality of audit work,effectively reduce the occurrence of audit failure,and promote the healthy development of China’s securities market and market economy.