A Case Study On The Audit Failure Of Reanda Firm's Backdoor Listing Of Jiuhao Group

Under the background that the China Securities Regulatory Commission has gradually standardized the business of accounting firms and strengthened efforts to rectify accounting firms that the number of been punished accounting firms in China is on the rise.Among all the accounting firms that are subject to administrative penalties for audit failure,Reanda Accounting Firm is representative both in terms of the number of audit failures and in terms of the problems reflected by audit failures.Reanda's failure in auditing Jiuhao Group's backdoor listing was heavily fined by 9million yuan.In recent years,the restructuring of backdoor listing of enterprises in China is active,and the demand of backdoor listing audit is also rising,and the number of Certified Public Accountants(CPAs)as the main executives of audit,is also increasing.So how to reduce the risk of backdoor listing and avoid audit failure has become a concern of accounting firms.Firstly,this paper reviews the previous audit failures of Reanda,and takes the case of Reanda's audit failure of backdoor listing of Jiuhao Group as the researchobject.Combining the analysis of the fraudulent behavior of Jiuhao Group,it sorted out the problems in the auditing process of Reanda.Then,this paper analyses the reasons of audit failure from the perspective of audit suppliers by using the audit market theory.This paper draws the following conclusions above the research:(1)The particularity of backdoor listing business and the internal control of the audited company is not complete increase the cost of accounting firm extracting information,which is the external cause of audit failure;(2)When the firm does not know enough about the company,the appointment of an accountant who has just obtained the qualification of a certified public accountant as the project manager is the essential reason for the failure of the audit;(3)Continuous administrative penalties have a great impact on accounting firms,and the lost of talents and the decline of the income are potential risks of future audit failure.