Case Study On The Audit Failure Based On The Punishments Of The CSRC Take The Nine Top Group Audit As An Example

Every year,some listed or listed companies are found to have financial fraud,and then the problem of audit failure will be pushed to the public view.The behavior of financial fraud of listed companies causes investors to not get the correct accounting information,nor can they make the right investment decisions,which will lead to turbulence in the capital market and even affect the macroeconomic regulation and control in China.With the rapid development of modern information technology and the transformation of economic structure,some emerging industries are pouring into the market.But there are also some companies that are eager for quick success and instant benefit to try to appear in the form of fraud,such as the nine best group in this case.Our CSRC punished 11 CPA firms and 26 CPAs in 2016 and 2017.In recent two years,the CSRC's supervision on capital market is more and more strict,and the CPA's failure to audit is intensified.For certified public accountants and firms,if the audit fails,it is likely to be eliminated by the market.More and more emerging industries have entered the securities market,and the means of fraud are changing rapidly.How to effectively identify financial fraud and avoid the failure of audit failure is a long way to go.In this regard,it is very meaningful to study the failure of financial fraud audit under the new situation.The prevention of audit failure can avoid market risk and reduce the losses caused by it,so as to safeguard the interests of investors and promote the healthy development of the securities market.Not only that,the quality of high audit and the failure of low audit are the basis of the healthy development of the audit industry.This paper uses literature based induction and summary of the domestic and foreign scholars research on audit failure,coupled with the principal-agent theory,the theory of fraud and modern risk oriented audit theory,combined with the case study method,through the review of nine group financial fraud audit failure cases.Analysis of nine good group fraud motivation and fraud of three reasons,the audit failure are: audit subject,not fully understand the audited entity and its environment in order to assess the risk,not to carry out effective audit procedures to deal with the risk,auditors are lack of professional doubt,the business firm quality control system is not perfect;audit unit,fraud motivation management,lack of internal control;supervision environment,civil compensation system is not perfect,the industry regulatory lag.According to these three aspects,further puts forward the countermeasures and suggestions of failure corresponding to the CPA audit: the need to strengthen the modern risk oriented audit concept,reasonable design and strict implementation of the audit procedures,keep the CPA occupation suspicion and independence,firms need to strengthen the quality control of the business;the audited units need to improve the corporate governance structure,improve the internal construction control;external supervision level need to improve the civil compensation system,strengthen supervision of the industry.