Zhonghua's Case Study Of Yabaite Audit Failure

As a result of the implementation of the "Belt and Road" policy and the "measures for the management of enterprises' overseas investment ",the capital demand of enterprises is increasing,and the use of backdoor listing with lower IPO threshold and financial fraud in overseas business are also emerging.Audit failures are likely to result from conflicts between CPAs and corporate audits,asymmetric information and incomplete transparency of external regulatory information that assume responsibility for the assurance of all material aspects of an enterprise's financial statements.This seriously affects the interests of investors.Firstly,this paper combs the definition,causes and preventive measures of audit failure by domestic and foreign scholars;secondly,analyzes the related concepts,theoretical basis and influence of audit failure,and briefly introduces the way and situation of financial fraud in abbott;and then analyzes the specific reasons of audit failure from firm,CPA,audited unit and external supervision environment respectively.In the case of Zhonghua,the audited units were not fully understood at the stage of business undertaking and the third level qualitycontrol review was not fully implemented;in the case of certified public accountants,no attention was paid to the income presentation in the notes,no further audit procedures were implemented,no analytical procedures were implemented and no audit was conducted Real ownership.In the case of Abbott,there is a dominant governance structure and pressure for higher performance commitments;in the external regulatory environment,the overseas regulatory mechanism is imperfect and the regulatory penalties are weak;finally,the relevant suggestions are put forward.Manage the system and strengthen the punishment.hope to provide some reference for firms,CPAs,audited units and external regulatory environment through the study of this case.