On The Problem And Optimization Of Accounting Firm’s Confirmation Procedure

The confirmation procedure is an indispensable part of the auditing process,which is of great significance for improving the overall audit efficiency and guaranteeing the quality of the audit.The establishment of a good letter-entry procedure system and the effective implementation of the letter-of-acquisition procedure are related to whether the audit work can be carried out smoothly and whether the CPA can obtain sufficient and appropriate audit evidence.However,in recent years,the cases of final audit failures due to the improper implementation of the confirmation procedure have emerged,and thus the accounting firms and audited units are punished by the Securities and Futures Commission one after the other.The case selected in this paper is Lixin’s auditing Jinya,which is derived from the administrative punishment decision announced by the China Securities Regulatory Commission on August 6,2018 on the official website.This paper takes this case as the research object,conducts specific research and reason analysis on the issue of the confirmation procedure,and finally proposes the optimization proposal of the execution of the confirmation program,in order that this research is beneficial to improve the audit efficiency of the accounting firm and the overall audit service quality.This paper takes case analysis as the main research method.Firstly,the author searches the domestic and foreign literatures on the confirmation procedure,to understand: the implementation of the confirmation procedure and its research status,including: a.the basic concepts of the confirmation(the definition,classification,characteristics and importance of confirmation);b.the implementation process of the confirmation procedure;c.the influencing factors of the execution of the confirmation procedure;and d.the relevant theoretical basis.Secondly,the author investigates and analyzes the problem performance of Lixin’s confirmation procedure.It reveals that Lixin had the following problems in auditing Jinya: a.no bank reply was found to be forged;b.no errors were found and no letter of credit for the letter of receivable.The abnormal situation of the mailing address and the invoice address was not found,and the necessary replacement procedures were not implemented.Then,according to the analysis of specific problems,it is found the following problems in the auditing subject Lixin: a.the weak sense of the completeness of the implementation of the confirmation procedure;b.the insufficient control of the implementation of confirmation;c.the imperfect implementation of the alternative test procedure;and d.the insufficient work attitude and ability of the auditors.It’s also found the problems in the auditing object Jinya: a.the lack of attention and cooperation to the confirmation procedure;b.the poor enthusiasm of the inquired unit;and c.its close relationship with the interests of the audited entity.Finally,for specific problem performance,this thesis proposes the optimization suggestions for the implementation of the accounting firm’s confirmation procedure,including the practice environment and supervision,the improvement of the current audit procedures,and the construction of the new letter platform.In terms of the practice environment and supervision,the CICPA and relevant departments should implement the auditing subjects of the auditing external practice environment,establish a fair competition market order,and increase the punishment for false auditing behavior.In terms of the improvement of the current audit procedures,the firms should change its line of thinking,standardize the execution system of confirmation procedure,implement the process control of the high-efficiency correspondence,and improve the professional level of the auditors;and the audited unit shall assign the commissioner to cooperate with the auditor to execute the letter-certifying procedure.The construction of the new letter-based platform is mainly to introduce“Internet + confirmation” concept,using an information platform to assist auditors to make the execution of the letter program more convenient and efficient.Hope the theoretical results of this paper will provide reference for the follow-up scholars engaged in the study of confirmation procedures.At the same time,the author hopes the proposed optimization suggestions to be tested in the future,and be helpful to improve the execution of the confirmation procedure.