Research On IPO Audit Failures

The emergence of CPA audit originated from the management system of the separation of the two rights of China's enterprises.With the diversified development of enterprises and the continuous expansion of scale,it plays an irreplaceable role in supervising the management activities of operators.The external independent social audit maintained the order of China's capital market and ensured its healthy operation,which made China's capital market maintain a good development trend.However,the number of listed companies in China has risen rapidly in recent years.In 2017,the number of IPOs reached 479,and it was nearly 200 in 2018.Some companies implemented financial fraud at the IPO stage,obtained listing qualifications,and CPA failed to be diligent and conscientious,even with the company,the IPO audit failures occur every year.In this context,the accounting information audited by the CPA has a false distortion,which makes the reputation of the audit industry suffer to a certain extent.These unfavorable factors will inevitably have an adverse impact on the operation of China's capital market.In order to restore the reputation of the CPA auditing industry,regain investors' confidence in China's capital market,shape a fair market environment,and promote the healthy and stable operation of the capital market,conduct an in-depth and comprehensive analysis of the IPO audit failure cases,and find out the behind it.The causal factors and the corresponding feasible suggestions and countermeasures have become a top priority.On the basis of relevant scholars' research,the author refers to the administrative punishment documents of the China Securities Regulatory Commission,summarizes the basic situation of the IPO enterprise audit pass rate in 2012-2018,and reflects that the scale of China's IPO is increasing,and the pass rate remains at a relatively high level.However,the audit failure event occurred after the IPO audit was passed.Therefore,the author further statistics on the IPO phase and the audit failure cases that passed the IPO audit but gradually leaked in the next few years.Combined with the statistical specific cases,the author summarizes the general and high-frequency factors that lead to the IPO audit failure,and then selects The latest example analysis of the IPO case of Dengyun shares,combined with the previous statistical conclusions,concluded that Dengyun shares prepared falsehoods during the IPO audit period mainly by underestimating the period expenses,recognizing the income in advance,concealing related party relationships and transactions.The financial report defrauded the listing;the main faults of Xinyong Zhonghe auditors in the IPO audit of Dengyun were manifested in the following aspects: failure to properly perform audit procedures,failure to maintain sufficient professional suspicion,and professional competence of auditors Lack of defects in the quality control system of the accounting practice.On this basis,it puts forward countermeasures from the aspects of the audited units,audit institutions and auditors as well as the audit industry environment,and provides reference for the development of China's IPO audit business.