Discussion On Failures Of CPA Audit

Since the early 1980.China restored the CPA system,which has been in existence for nearly 40 years.During these decades,the system has continued to develop and improve.at the same time,there have also been cases of repeated corporate frauds and audit failures.This situation has not only affected the economic development and the operation of the capital market,but also made it difficult for companies to maintain daily operations after being exposed,forced them to go into bankruptcy and liquidation.In addition to the loss of investors,the frequent occurrence of accounting frauds and audit failure cases has also brought great negative impact on the audit practitioners.Facing this situation,it is particularly important to analyze the causes of audit failure and put forward measures to prevent audit failure.This article takes the research background and research significance as the starting point and briefly describes the research content of this paper.This article uses the domestic and foreign literature to summarize several reasons for audit failure,and defines the concept of audit failure and distinguishes the relationship between audit failures,business failures,and audit risks.This article refers to the 66 CSRC penalties announcements from 2001 to 2017 to sort out the status and characteristics of our audit failures.Secondly,the case study was focused on the audit failure case of Reanda Certified Public Accountants on Tianfon Energy Saving.Then analyzed the reasons for the failure of the audit:in this case,the reason for the Tianfon Energy Saving was the flaws in financial fraud and internal control;for the Reanda's failure to maintain full professional suspicion,rigorous implementation of audit procedures,etc.;and the reasons for the external environment include the complexity of the IPO audit.Finally,this article proposes the corresponding rectification measures from the analysis of the reasons for the audit failure.Including companies should improve their own corporate governance structure and give full play to their internal audit function;Accounting firms should maintain high professional skepticism,strict implementation of audit procedures,pay attention to income fraud and related transactions,and strengthen quality control systems;and the regulators should improve audit market access standards and improve capital market legal regulations.