A Case Study On Audit Failure

The CPA audit is the “last line of defense” to ensure the authenticity of accounting information and expose financial fraudulence behavior.It is of great significance to enhance the confidence of investors and ensure the normal operations of the capital market.However,due to the constraints of various conditions,the cases of audit failure appear frequently,which not only bring economic losses for investors,but also make them begin to doubt the competence of CPA.Since 1998,the China Securities Regulatory Commission has begun to strengthen the investigation and punishment of audit failure.However,the cases of audit failure also present a feature of “continuing to arise”,which makes us start thinking that whether the occurrence of audit failure still have a deeper reason.This paper selects the company T,punished by the CSRC recently,as a breakthrough point to study this topic in hope of making contributions to improve audit work and prevent audit failure.According to the punishment announcement issued by the CSRC,the reasons for the punishment of accounting firm H include did not implement alternative procedures,lack of necessary audit procedures,and auditors did not have professional skepticism.Combined with the penalty announcement issued by the CSRC in recent years,this is a common cause for many companies be penalized.Therefore,it has strong representation to take this case as the breakthrough point to study this topic.In terms of the structure of the paper,it combines with the penalty announcement issued by the CSRC in recent years.Based on the analysis of the case of audit failure by accounting firm H,the paper discussed the common problems existing in the audit industry.Furthermore,it put forward suggestions to improve audit quality and prevent audit failure from the perspective of accounting firm,auditors,and regulators.The innovation of this paper is that it analyzed the problems exposed in the process of auditing,studied the universality of these problems in the industry,researched the deeper causes of audit failures,and finally put forward suggestions which has certain universality.However,due to the lack of practical audit experience,the suggestions proposed in this paper may be insufficient in terms of practicality and effectiveness,which remain to be tested.