Sinovel Audit Failure Analysis And Prevention Mechanism Design

As the development of the capital market in our country matures,people are paying more and more attention to the quality of accounting information.As a result,the certified public accountant as the last level to check the authenticity of financial information has increasingly attracted public attention.Therefore,the audit reports issued by the certified public accountants has also received more and more attention.But,in recent years,due to the frequent occurrence of audit failures at home and abroad,the credibility of accounting firms and certified public accountants has been severely hit,triggering an overall crisis of confidence in the audit industry.Therefore,research on the causes of audit failures and preventive measures is very important.This article begins with the definition,causes and prevention of audit failures,and sorts out and summarizes previous research.Then,combined with modern risk-oriented audit theory,principal-agent theory,and "reasonable economic man" hypothesis,we analyze the failure cases of Sinovel audit.First of all,according to the modern risk-oriented audit process,we will sort out the problems existing in the implementation of the audit process by Reenda,and and analyze the reasons.The reasons are the pressure of competition in the auditing industry,the improvement of professional ethics and professionalism of certified public accountants,the imperfect internal control system of the firm,and the low cost of violations.Finally,according to the results of the case analysis,the audit failure prevention mechanism was designed from three aspects:accounting firm,certified public accountant,and external supervision.This article has enriched and improved the research on audit failure to a certain extent,and it is also a test and development of existing research results.It is hoped that the research in this paper can remind CPAs to pay special attention to the factors that may lead to audit failures in all aspects of the audit process,and early prevent them,thus reducing the occurrence of audit failures.