Ruihua Firm To Lingqi Share Audit Failure Case Study

With the rapid development of the economy and the maturity of the capital market,all kinds of profit seeking violations have seriously damaged the market environment,and the regulatory work is also facing new challenges.In this context,regulatory authorities,investors and the audited units all put forward higher requirements for audit quality and stronger dependence on audit reports.However,with the investigation of financial fraud,information disclosure distortion and other violations,the audit failure is also exposed,and the audit quality is also concerned.Audit failure will not only cause the loss of real information users' property,but also damage the reputation of certified public accountants and accounting firms,and have a negative impact on society.Based on this,a detailed analysis of audit failure cases is of great significance to enrich audit research,reduce audit risk in practice and promote the normal development of the market.Firstly,the paper defines the audit failure,summarizes the impact of audit failure,and expounds the relevant theories of audit failure.Secondly,it introduces the background of audit failure of zero seven shares by Ruihua office,including the basic situation of zero seven shares and Ruihua office,violations of zero seven shares,audit opinions of Ruihua office,and the impact of audit failure on both parties.Thirdly,combined with the background of the case and the main influencing factors of the audit process,this paper analyzes the causes of the failure of the audit of zero seven shares by Ruihua firm around certified public accountants,accounting firms,audited units and external audit environment.At the level of certified public accountants,the reasons include improper audit procedures,insufficient professional ability and failure to be diligent and prudent;at the level of accounting firms,the reasons include lack of understanding of the auditee and imperfect quality control system;at the level of auditee,the reasons include deterioration of financial results,increase of audit risk,diversification,increase of audit difficulty,defects in internal control and trust The external regulatory environment factors include fierce market competition,weak external supervision and insufficient punishment.Finally,based on the analysis of the causes of audit failure,this paper summarizes the conclusions of the case study,and puts forward the case enlightenment of audit failure,in order to provide effective prevention strategies and references for audit failure.