The Influence Of Kangmei Pharmaceutical’s Audit Failure On The CPA Industry And The Countermeasures

The audit of annual financial statements of listed companies has always been the focus of market attention.With the continuous development of the securities market,the financial audit system for listed companies is becoming increasingly perfect.As an important examiner in undertaking the audit of financial statements of listed companies,certified public accountants play an irreplaceable role in identifying whether the financial information disclosed by them is true and reliable.However,in the context of the growing market of listed companies,their business is becoming more complex and cumbersome,and the use of loopholes for financial fraud is becoming more covert.The audit work of certified public accountants is facing severe challenges and increasing pressure.In 2018,Kangmei Pharmaceutical’s financial fraud event attracted market attention.As the leader of the pharmaceutical industry,this audit failure event had far-reaching impact,not only caused many investors to suffer heavy losses,but also generated huge negative public opinion on the entire pharmaceutical industry and the securities market.Zhengzhong the Pearl River Certified Public Accountants,who undertook this audit,was responsible for this and was severely punished by the CSRC.The audit failure event has aroused concern in both the theoretical and practical circles,and scholars are constantly exploring the complex reasons behind the audit failure to improve the audit process and standardize market order.Analyzing this case has extremely important practical value for preventing audit failures and improving the standardization of the certified public accountants industry.Based on this as the starting point,and on the premise of a large number of empirical studies,this article has conducted a detailed review of the process of financial fraud in Kangmei Pharmaceutical,and analyzed the means and methods of financial fraud in Kangmei Pharmaceutical based on theoretical foundations such as the fraud triangle theory,and summarized the underlying reasons.As the direct person in charge of this audit,Zhengzhong the Pearl River Certified Public Accountants Co.,Ltd.made serious mistakes in the audit process and had major defects in the audit procedure.However,from the analysis and research,the audit failure of Zhengzhong the Pearl River Certified Public Accountants Co.,Ltd.was not accidental.As an audit institution that has undertaken Kangmei Pharmaceutical for nearly 20 years,it has at least serious deficiencies in risk identification and assessment,internal control testing procedures,etc,Shall be directly responsible for the failure of this audit.Of course,apart from the reasons for the audit failure of the firm itself,there are also certain defects at the level of certified public accountants and external supervision,which together led to the occurrence of the audit failure event.The audit failure of listed companies has a significant impact on the market.At the same time,this article puts forward corresponding countermeasures and improvement suggestions from the perspective of benefiting the development of the entire certified public accountant industry.It is hoped that this study can provide certain reference significance and practical value for improving market norms and preventing audit failure.