Study On The Causes And Countermeasures Of Audit Failure In Accounting Firms

The audit report issued by the accounting firm is the main basis for evaluating the quality of accounting information,and it is an important reference for investors in making investment decisions,evaluating the management level of managers by managers of enterprises,and formulating economic policies by the government.However,with the continuous development of the market economy,competition among enterprises has become increasingly fierce.Some companies have chosen to engage in financial fraud due to performance pressure after listing.At this time,if the auditor is unable to detect the fraud of the audited entity,he still issues an inappropriate audit opinion,or colludes with the audited entity to conduct financial fraud together,Audit results will be difficult to achieve the desired results,and audit failures will become reality.This is also an important reason for the credibility of audit institutions in recent years.Audit failure not only damages the interests of users of financial information,but also leads to improper management by corporate managers,and even damages the reputation of the audit industry.Therefore,how to improve the audit environment,improve the quality of audit reports,reduce audit risks,and reduce audit failures has become a problem that the professional community has been thinking about and addressing.This article uses a combination of theory and case analysis to study the audit failure of company M.First,by collecting and reading a large number of domestic and foreign literature about the related issues and theories of the concepts of audit failure and audit risk,the reasons for audit failure,the impact of audit failure,and countermeasures for audit failure are explained.Secondly,combining specific M company audit cases,Analyze its means through the fictional Multan project,the fictional Anmei international project,and the fictional domestic building materials sales,to achieve the purpose of inflating operating income and alleviating performance pressure caused by the signing of unrealistic performance compensation agreements.Based on this,a comprehensive analysis of the problems existing in the audit of M company by accounting firm A,Including risks such as failure to identify the audited unit's industry,internal control and fraud,substantive analysis procedures are not in place,etc.Summarized the reasons for audit failure,Including: Auditors failing to perform their duties in the audit,the firm did not identify the risks,and Company M has performance pressure and internal control failure.Finally,it puts forward relevant countermeasures to achieve the purpose of preventing audit failure.