Research On The Inducement And Repair Countermeasures Of Reputation Damage Under Audit Failure

The audit reputation of accounting firms refers to the degree of public trust and praise on the audit quality of certified public accountants.Under the function of signal transmission,the high audit reputation can bring more customers to firm and excess return,known as the "premium" reputation,on the contrary,the lower the reputation will trigger the alarm of low audit quality,including administrative punishment regulation,customers to hire,limited business,the auditor loss,serious economic consequences,is called "spillover effect" of reputation damaged.The audit reputation of accounting firms is a self-regulating mechanism formed during the development of audit market and an invisible hand to maintain the balance of audit market.By transmitting the signal of audit reputation of accounting firms,the audit ecology of survival of the fittest can be built.Audit market,the development,the need to have the high reputation of auditors to escort,but in recent years,frequent audit failure events often become important trigger for the reputation damaged,therefore,under the background of the audit failure,explore the specific cause of certified public accountants damaged reputation,reputation and find the path of the repair is the value of this article research.As a member of BDO,li Xin accounting firm is also a well-known domestic capital firm in the Chinese industry.In recent years,its reputation has been continuously damaged due to the emergence of major audit failures such as Shanghai DZH Limited,Zhejiang Busen Garments,Geeya Technology,GuoYao Technology,and ChaoHua Technology.It conforms to the standard of typicality and applicability of case selection.In this paper,lixin CPA firm is taken as a case study object,and August 2014 to December 2018 is taken as the observation period to continuously track lixin firm,and the development of the reputation destruction crisis is explained by combing the time line before and after the reputation destruction of lixin CPA firm.According to the thinking of "Review of cases of firm reputation destruction to Economic consequences of firm reputation damage to Analysis of causes of reputation damage to Countermeasures for reputation restoration",this paper uses the life cycle theory of loss of corporate reputation for reference directed by famous management Docter Fink.Accordingly,the reputation damage crisis of lixin is divided into the following four stages,and the countermeasures for reputation repair in different stages are given.The first stage is the latent period of crisis,which is mainly caused by its biased strategic positioning and lack of awareness of reputation maintenance.To this end,this paper puts forward the countermeasures of "crisis prevention and strategic early warning",such as moderate expansion in the development process and timely resource integration.The second stage is the crisis outbreak period,the main incentive is the business execution is not standard,resulting in audit failure and reputation damage,to which this paper proposed "crisis control,reconstruction of the audit environment" countermeasures,strict audit process,reduce the audit error rate;The third stage is the crisis diffusion period,and the main incentive is the lack of crisis management and control and risk response.This paper proposes the countermeasures of "crisis rescue,strengthen crisis public relations",timely respond to audit punishment,and avoid the "butterfly effect" of reputation damage to control the spread of the crisis.The fourth stage is the period of crisis resolution,and the main incentive is the lag in reputation repair.This paper proposes the countermeasures of "resolving the crisis and rebuilding the reputation",seizing the opportunity to spread the positive image of the firm through technological innovation,knowledge sharing and other ways.In this paper,according to lixin accounting firm reputation damage and repair of case analysis,put forward the initiative to establish high reputation of audit,make full use of big data audit technology,strengthen supervision and improve the violation cost,build reputation transmission system,and do the audit of certified public accountants painting "medical doctor" customer's economic health,establish a reputation as the core of Suggestions and Revelations of the public crisis management system,in order to build a good ecological environment audit the audit market in China to offer help.