The Study Of Reanda Certified Public Accountants Co.Ltd Auditing Failure In The Case Of Jiuhao Group

With the continuous and rapid development of China's socialist market economy,the capital market is also showing a pattern of pluralism and stratification,and the intensity of competition in capital markets is increasing.Enterprises to accelerate their own development,improve capital strength to expand the asset scale,the first task is to expand the financing channels,and the expansion of financing channels is one of the effective way to achieve the company listed.In recent years,the number of listed companies in China has been increasing,many companies use all kinds of financial fraud means to enter the capital market,which seriously disturbs the normal market order.As an independent third party,CPA plays the role of "the witness" in the capital market.They verify the financial information of the company and reasonably guarantee the fairness of financial information.However,the audit failure cases appeared frequently in public view,From 2013 to May 2018,the CSRC issued a total of 34 administrative penalties to certified public accountants and accounting firms that failed in auditing,up from 10 in 2017 alone.The audit quality of certified public accountants has been greatly questioned.First of all,this paper starts with the research background and significance of the paper,and makes a literature review from three aspects: factors affecting the quality of CPA audit,causes of CPA audit failure and prevention of CPA audit failure.At the same time,the research ideas and methods of this paper are summarized,and the literature analysis method and case analysis method are selected for further discussion in the specific research.Secondly,this paper summarizes the theory of CPA audit failure,and introduces the meaning of audit failure.Based on the study of the main viewpoints.I think the audit by certified public accountants should understand due to subjective fault is not strictly implement accepted auditing standards,thus failed to find the auditees existence of fraud or gross errors,finally published and enterprise audit opinion is inconsistent with the actual situation.Thirdly,this paper makes an in-depth discussion on the case of audit failure of lianda accounting firm,introduces the basic information of jiuhao group and lianda accounting firm,and introduces the whole process of financial fraud of Jiuhao Group in detail.The financial fraud means of jiuhao group include: increase the service fee income through fictitious supplier and customer,fictitious fund circulation;Fictitious trade contract increases trade income;Fictitious bank deposits;Loan and pledge behavior is external disclosure.Then,the problems in the audit practice process of lianda accounting firm are analyzed.There are defects and contradictions in the field visit of suppliers and customers during the audit of lianda accounting firm;Not enough attention is paid to the relative contract and insufficiency of the evidence of seal and income;Failure to implement effective verification procedures for accounts receivable;Bank deposit audit procedures are not in place.On this basis,the specific punishment results of China securities regulatory commission for lianda accounting firm and its signed certified accountants,jiuhao group and its relevant persons are expounded.In addition,this paper analyzes the causes of audit failure of Reanda accounting firms,mainly from three aspects: CPA and accounting firms,auditees,audit industry environment and combined with specific cases for in-depth analysis.The main aspects of CPAs and accounting firms are:Certified Public Accountants have not diligently performed their duties;Certified Public Accountants did not strictly follow the requirements of auditing standards;CPAs are not professionally skeptical about unusual financial data;Weak audit quality control of Reanda Certified Public Accountants.The internal aspects of the auditees are as follows:Jiuhao Group financial fraud means has a strong concealment;Jiuhao Group lacks sound corporate governance mechanism;Jiuhao Group has illegal motivation for the purpose of listing on the backdoor.From the aspect of auditing industry environment of certified public accountants:The existing legal penalties are not enough;External supervision of CPA industry is not in place;The fierce competition in China's CPA auditing market.Finally,the conclusion is drawn according to the analysis of audit failure cases of jiuhao group by lianda accounting firm.First,the lack of professional competence of certified public accountants is the root cause of audit failure.Second,the imperfect risk control system of accounting firms is the direct cause of audit failure.Third,Jiuhao Group malicious fraud and internal control failure is the indirect cause of audit failure.Fourthly,the environment of CPA industry is the external reason influencing audit quality.On this basis,the relevant enlightenment of the audit failure of Reanda accounting firm is concluded,mainly including: Paying attention to the cultivation of professional competence of Accountants is the core;Reform of fraud auditing methods and techniques is the fundamental way;Establishing and improving audit quality control system is the key;Strengthening market supervision and increasing the crackdown on violations are safeguards.