Zhenlong Company Audit Failure Problems Research

With the rapid development of market economy in our country,the important role of CPA is gradually prominent,and the influence of CPA audit in economic activities is increasing day by day.However,in the actual market economy activities,the audit failure of CPA often happens.The major financial fraud cases in the capital market in recent years have more or less to do with audit failures.The entire social audit industry has been hit hard by these blockbuster audit failures.At the same time to the market has brought adverse effects,to investors caused huge losses.For this reason,it is necessary for us to study the causes and background of audit failure.By analyzing the causes of audit failure and studying and evaluating the existing problems,this paper puts forward some preventive measures,which will be helpful for CPA to pay attention to key links and prevent audit risks in the future audit.In this paper,we will study the audit failure cases of the Zhenlong company,and divide into six parts to study the case related issues.The paper first elaborates the research background and significance,and the question about audit failure of all kinds of paper summarizes research results,organize the overall framework of this article,and then combing the mainstream of audit failure definition and related theory,through the theoretical explanation for the paper for vibration after audit failure analysis provides the basis.Then review fraud means of Zhenlong company and the CSRC on Zhenlong company and punishment of the Ruihua certified public accountants,analysis found that auditors in the audit of the lack of risk assessment and analytical review is inappropriate.And in-depth analysis of the factors that affect the audit failure,mainly has the following four aspects: risk assessment is not in place,the substantive procedures of the sales link are not effective,improper method of inventory monitoring,insufficient inspection of raw material prices.Finally according to the specific condition of Zhenlong company production audit failure case,giving suggestions from the following four aspects: to learn more about Zhenlong Company,control audit evidence quality,improve the inventory control procedures,focus on the authenticity of raw material prices.