Research On Dysfunctional Auditor Behaviors From The Perspective Of Professional Reputation

The CPA auditing system is a major institutional arrangement to ensure the sustained and stable development of the capital market.With the improvement of the external supervision environment,investors continue to pay close attention to their own profits,and stakeholders have higher expectations of auditors’ professional standards,professional judgments and audit independence.As the last line of defense against agents fraud,the auditor should provide forensic services to customers in a detached and independent manner.On the contrary,due to the intertwining of various factors such as the external environment and its own characteristics,a variety of dysfunctional auditor behaviors often appear throughout the entire career process,and even become the collusion of financial fraud.This is inconsistent with investors’ initial expectations.Although the inherent limitations of the audit cannot provide absolute guarantees for the existence of material misstatement of the financial report,if the dysfunctional auditor behaviors is investigated and dealt with by the regulatory agency such as the securities and futures commission,it will still have serious economic consequences:Auditors will therefore lose public trust and face potential legal proceedings.Once the individual auditor’s reputation suffers,his /her original market share and customer portfolio are bound to change.Optimizing the behavior in the process of auditing practice is the only way for auditors to avoid reputation damages,maintain their qualifications,expand their businesses,increase their income,and enhance industry recognition and public acceptance.Based on the theoretical basis of information asymmetry,signal transmission and behavioral psychology,this paper first analyzes the external regulatory environment of the auditors from the perspective of the entire industry,and then analyzes the auditors who were punished by the CSRC from 2012 to 2017.The various dysfunctional auditor behaviors and this behavior had an impact on the auditor’s personal reputation.Finally,A’s accounting firm was taken as an example to analyze the causes of dysfunctional auditor behaviors in the profession of the firm’s members and the market reaction after being penalized by the CSRC.,and the subsequent restoration of related reputation.Through the study of this case,the relevant theories were verified,and from the perspective of auditors to maintain and improve their reputation,put forward suggestions for optimizing audit behavior.To a certain extent,the occurrence of dysfunctional auditor behaviors can be avoided from the source,increase the public’s trust and recognition of auditors,this will enable the real economy to better serve the overall development.