Analysis On Audit Failure Of Lianda Accounting Firm

The separation of ownership and management rights of modern enterprises has resulted in the audit service of CPA.Since the 18 of the party's major,with the vigorous development of the capital market,This market plays an intermediary role in the process of financing,and provides support for the certification services of certified public accountants.It can not only solve problems for securities investors,but also increase their recognition and confidence in listed companies.Capital market is the intermediary of capital financing,in the process of financing,CPA's forensics service has played a huge role,helping to eliminate the doubts of securities investors and build the cornerstone of securities investors ' trust in listed companies.However,the failure of audit has occurred repeatedly,which not only makes CPA face a huge litigation risk,but also endangers the fair image of audit industry.With the occurrence of more and more audit failure cases,The public's trust in the quality of audit reports has gradually declined,which brings unprecedented tremendous pressure to China's CPA industry,accompanied by more stringent requirements for CPA industry as a whole.In recent years,the situation of domestic companies' backdoor listing and reorganization has continued to increase,which has led CPAs to deal with a large number of backdoor listing audits.Throughout the present,the borrowers can find many financial frauds,or fail to meet the listing criteria,or The high share price of Laguna led to many cases of failed CPA audits,which led to a decline in the overall reputation of the CPA industry and a significant negative impact on the credibility.At present,the CPA profession has conducted in-depth discussions on auditing of accounting firms,exploring the causes of failures and summing up lessons.This article is divided into five parts,the first part from the article's research background and significance began to describe,a brief introduction of the CPA audit quality of the concept and impact of the study,the definition of audit failure at home and abroad and the causes and countermeasures of the literature summed up.Furthermore,a brief description of the context,methods,and content of this paper,and a concrete research framework through structural drawings.The second part,first of all,comprehensively explores the concept of failure and makes a determination to summarize the specific characteristics of audit failure,then describes the characteristics of audit failure,and then from four aspects of the reasons for audit failure to make a brief analysis,and use the previous theory to explain it.Finally,the paper analyzes thetheoretical basis of CPA audit failure,the related theory has the conflict theory of audit,the principal-agent theory of audit and the information asymmetry theory of audit.The third part briefly introduces the basic situation of the accounting firm and the audited unit in this case,as well as the process of the audit failure of the financial fraud event of the audited unit,and then introduces the financial falsification of the audited unit in this case.This paper also introduces the administrative penalties of the SFC for the accounting firms and certified public accountants involved,including the process of the SFC's determination of the illegal acts of Lianda and the signed CPA,as well as the legal provisions on which the administrative penalty is based.Part IV analyzes the specific reasons for audit failure in this case from four aspects.The first is the poor practice environment of audit industry,which is manifested in the low cost of violation under the punishment and the insufficient high quality audit demand,followed by the unsound internal governance and quality control system of ANDA accounting firm,and points out that there is an equity dispute within the accounting firm of Anda,There are some problems in the implementation defect of income cycle audit and the defect identification and evaluation of audit risk in Anda accounting firm.Thirdly,this paper analyzes the problems existing in the audit process of ANDA accounting firm,such as the failure of the risk identification and evaluation stage to fully understand the units under review and their environment,and does not implement sufficient substantive procedures,The lack of professional doubt on the abnormal change of profit index and the failure to strictly enforce the review of audit manuscripts have led to the failed audit of this case.Finally,the industry particularity of the audited unit increases the difficulty of audit verification.The fifth part draws the lesson of the audit failure case in this paper.Through the analysis of the audit failure cases,this paper summarizes several lessons:first,we should improve the audit system and legal system,strengthen the government supervision,and secondly,speed up the construction of social public supervision platform;Internal governance has an important role to play.,The establishment of civil liability system of CPA and the civil compensation system of accounting firms can effectively improve the audit quality,and finally the practice quality of CPA needs to be improved,and the ability of practicing competence and professional ethics should be strengthened.