Case Study On Audit Failure Of Rui Hua Certified Public Accountant Co.Ltd To Huaze Cobalt And Nicke

With the strengthening of financial supervision.In the report of the 19 th National Congress of the Communist Party of China,it was pointed out that the improvement of the socialist market economy system should be accelerated and the bottom line of no systemic financial risks should be kept.China Securities Regulatory Commission(CSRC)said it would strengthen the risk prevention in pledge of shares,bond default,private fund and other key fields to safeguard the smooth operation of the capital market.In Chinese financial market,the accounting firm,as the auditor of financial information,will estimate the integrity,authenticity and veracity of the financial information of the audited company and asset the validity of its financial management and internal control.For this reason,there is no doubt that the accounting firm is quite important.Because the certified public accountant fails to perform the duty,execute the substantial analysis procedure,fully test the details and keep required occupational doubts,the cases of audit failure happen frequently in recent years,which result in the unfair and invalid social profit distribution and cause sever damage to the order of market economy.In this case,it is important to study the audit failure case.This paper,in the form of a case,profoundly analyzes the case of Huaze Cobalt and Nicke by Ruihua CPA Co.Ltd,and makes a thorough inquiry and comes up with corresponding prevention suggestions to promote the sound development of the auditing industry.Starting from the background and meaning of the theme,the paper firstly uses literature research method,reviews lots of research focus on the audit failure,sorts out the research methods and summarizes the current research fruit and elaborates the general factors that cause the audit failure.Then use the case study method to make a brief presentation of the Huaze Cobalt and Nickel case.Firstly,the paper introduces the general situation of Huaze Cobalt and Nickel,points out the cheat methods,then describes the firm's mistakes in the auditing course.On this basis,it analyzes the failure reason in detail,dissecting the reason respectively from perspective of the external factors,audited enterprise and the certified public accountant.Last,according to the problems and combining the status quo of auditing industry,the paper puts forward the preventive measures from the aspects of external supervision environment,internal corporate governance and certified public accountant.The supervision department should make more investigations and surveys,timely promote the improvement of auditing recruitment system,seriously investigate the legal responsibility of the relevant personnel who failed in the audit to increase the violation cost of the accounting firm.The accounting firm should sound its risk control system,perfect quality control system and improve the auditing quality.Auditors should keep occupational preciseness and strictly execute the auditing procedure to ensure the audit quality.