ZX Accounting Firm Audited WH Company Failure Case Study

Today,when audit failures occur frequently,the CSRC continues to strengthen the supervision of audit quality,and many audit issues have become hot spots in academic research.With the deepening of supervision,investors’ requirements for certified public accountants have become stricter,in addition to standard unqualified opinions being wrongly issued,the shortcomings in the field of non-standard audit opinions have also been exposed one by one,and have attracted the attention of the audit industry.Although the audit standards are vague about non-standard audit opinions,if the certified public accountant does not strictly abide by the auditing standards and disclose the actual situation of the audited entity,the rights and interests of the majority of investors will still be infringed.Therefore,this paper selects ZX Accounting Firm to study the audit failure cases of WH Company in 2020,discuss the problems in the audit process under the qualified opinion,the reasons for the occurrence of audit failure and preventive measures,and provide inspiration for the research on audit failure under non-standard audit opinion.The study found that ZX Accounting Firm had a variety of problems in the audit process: first,improper judgment of going concern;Second,the measurement of expected credit loss is unreasonable without detection;Third,the scope of the accounts receivable correspondence is too small,then and the irregular implementation of other audit procedures.The study shows that the reasons behind these problems are that auditors overestimate the role of new management in improving operational capabilities,lack of experience in responding to impairment audits of new financial instruments,limited competence,and high time pressure.In view of the above problems and causes,this paper proposes four solutions: first,pay attention to the changes in the company’s ability to continue operations,attach importance to the overall judgment of business performance,and accurately evaluate the feasibility of management improvement measures;Second,build a special response strategy for financial instruments,identify the management’s earnings management tendency,and introduce information technology to participate in complex computing;Third,improve the professional quality of the audit team,improve the introduction and training mechanism of audit talents,and implement the quality review system of the firm;Fourth,improve the personnel allocation mechanism of the firm,allocate audit business according to the characteristics of employees,and avoid the situation of ‘short time and heavy tasks’ in audit work.