A Study On Audit Failure Of China Huishan Dairy Holdings Company Limited

With the rapid development of capital market,CPA audit has become one of the indispensable mechanisms in China 's market economy supervision system,playing an increasingly important role.However,while the CPA industry is booming,the quality problems exposed can not be ignored.In recent years,the financial fraud of listed companies and CPA audit failures occur frequently,not only brought huge economic losses to investors,but also make people questioned the role of CPA " economic police",in this context,it is of great practical significance to explore the reasons for the failure of audit,causing us to think.The first part of the article firstly elaborates the research background and significance of this article,introduces the research methods and contents,and summarizes the related literatures of domestic and foreign scholars on audit failure research.The second part analyzes the theory of audit failure.This paper explains the definition of audit failure,and discriminates the correlation between audit failure and concepts such as business failure and audit risk.Based on the hypothesis of " rational economic man" and principal-agent theory,this paper puts forward the theoretical basis of audit failure.The third part introduces the auditing case of Huishan dairy industry by KPMG.This article takes the financial fraud case of China Huishan dairy holding co.,ltd.in March 2017 as an example,and introduces it from three aspects: the financial fraud of Huishan dairy,the " standard unqualified opinion" issued by KPMG and the disclosure report issued by muddy water.The fourth part explores the reasons of audit failure.Discuss and analyze the reasons of audit failure from the aspects of audited units,certified public accountants and accounting firms and external environment.First,there is motivation of financial whitewashing in enterprises,and the corporate governance structure is unreasonable.Second,accounting firms and CPA have faults,and they fail to do a good job in accounting and supervision.they have poor assurance of independence,shallow analysis procedures and poor professional competence.Third,the external environment is confronted with the pressure of the government,and at the same time,the punishment intensity is insufficient,the laws and regulations are not perfect,and there is a lack of effective industry supervision.Finally,according to the reasons of Huishan dairy industry audit failure,we think.From three aspects of certified public accountants,accounting firms and external audit environment,this paper puts forward some suggestions on auditing failures of listed companies: first,we should grasp the independence of certified public accountants,constantly improve their comprehensive qualities and professional ethics,act in good faith and be objective and fair,and when necessary,we can ask experts with senior experience for help.in the process of auditing,we should pay great attention to and pay attention to some highrisk links,and adopt targeted auditing methods to audit related party transactions through analytical auditing procedures.Second,accounting firms comprehensively promote partnership organization and improve the internal quality control system;Third,the external audit environment should improve and optimize the relevant national laws and regulations,strengthen the supervision and management of government agencies,and increase the illegal cost;Four is to improve the industry supervision mechanism,improve the supervision efficiency;Fifthly,standardize the audit market competition.