Kang Dexin Audit Failure Study

In the past two years,there have been many cases of audit failure in China.Financial fraud cases of listed companies represented by Kangdexin,Kangmei pharmaceutical,Wanfushengke,Geeya technology,etc.are definitely not only simple audit failure cases,but also systematic credit crisis of the capital market.Because this not only hit the investors’ confidence in the securities market,but also made the accounting firm industry become the focus of public opinion criticism,which severely damaged the reputation and image of the accounting firm.Take the case of audit failure of Kangdexin as an example,the actual net profit of four consecutive years is negative.During this period,Ruihua accounting firm in charge of audit collected a total of 8.4 million yuan of audit fee,but failed to find the financial fraud of Kangdexin’s accumulated virtual increase income of up to 11.9 billion yuan.As an accounting firm ranking so high,but in the audit process of Kangdexin,there are so serious audit errors that lead to audit failure.Therefore,through in-depth study of the audit process and audit methods of Ruihua certified public accountants,we can find out the problems in the audit process,analyze the causes of audit failure,and draw valuable lessons from them,so as to provide targeted suggestions for the audit work of listed companies by accounting firms,and reduce or avoid audit failure as much as possible To improve the audit quality and provide reference and warning for Ruihua and other accounting firms.This paper consists of the following five parts.The first part is the introduction,which mainly explains the research background and significance of this paper,summarizes the research status of audit failure at home and abroad,and expounds the research content and methods.The second part introduces the basic situation of Ruihua accounting firm and Kangdexin,reviews the whole audit failure,and analyzes the causes and means of Kangdexin’s financial fraud.The third part analyzes the main causes of audit failure from four aspects:Ruihua accounting firm,certified public accountant,Kangdexin and industry supervision.The fourth part,according to the analysis of the causes of audit failure in the third part,combined with the advantages of big data audit in the era of big data,puts forward relevant countermeasures to prevent or avoid audit failure.The fifth part is the conclusion of this paper,which summarizes the whole paper.This paper mainly uses literature analysis,case analysis and comparative analysis to study the case.In recent years,Ruihua certified public accountants has been punished continuously and has no remorse for the first offence,so it has certain particularity in the selection of cases.At the same time,this paper also puts forward the idea of applying big data audit and artificial intelligence technology to the audit business of accounting firms in the new era,in order to promote the fundamental change of audit mode.