The Cause And Consequence Of Audit Failure By Reanda Certified Public Accountants LLP

As one of the external corporate governance mechanisms,audit can improve the authenticity and fairness of financial reporting information.Audit quality is the soul of auditing,for customers,high quality audit services can meet the requirements and satisfaction of customer.However,ensuring the quality of financial reports and maintaining the healthy and orderly development of the market economy play an important role.For the firm itself,the quality of the audit services can improve their independence and can enhance reputation.Therefore,it is important to expand the relevant business and improve economic efficiency.Since the reconstruction of the CPA industry,China's independent audit industry has developed rapidly and played an important role in the market economy.Unfortunately,financial fraud and audit failures occurred frequently in the capital markets.According to incomplete statistics,from 2011 to the present,the Commission on audit failures of accounting firms and certified public accountants issued a total of 36 cases of specific administrative fines,involving 27 family houses and 68 certified public accountants,audit failures occurred frequently.It leads us to think about the following questions:why the economic police accounting firms and CPAs did not play the role in supervision? What causes audit failure? What are the economic consequences of audit failure to the accounting firms and CPAs?The four audit failure case analysis of reanda during 2009-2015 is based on the method,through the combination of literature research and case study,inductive analysis,onthe basis of domestic and foreign scholars on the research results,through the collection of2009-2015 Commission which has released the reanda accounting firm punishment notice,from the two aspects of professional competence and ability to analyze the reason of independence audit failure.Combined with the existing model of our government audit supervision,we analyzed the impact of audit failure of reanda certified public accountants and the effect of the punishment from the point of view of the number of customers,audit fees and audit quality.The study found that the audit failure of accounting firm is mainly because of the low audit quality,and the relationship between accounting firms and CPA which lacks of independence caused the law audit quality.And the audit client generated economic dependence.After the failure of the Commission,we also learned that the impact of audit failure on the analysis of reanda certified public accountants is to have some effect on the punishment,but the effect is not obvious,which did not significantly improve the reanda certified public accountants audit quality.The above research can provide relevant experience and lessons for CPA firms and CPAs,and has practical significance to improve the audit quality of certified public accountants.At the same time,it also provides some reference experience for the Commission to improve the regulatory capacity and improve the regulatory approach.