Case Study On Failure Of Zhongtianhuamao Certified Public Accountants’ Audit To "*ST Meishang"

The audit system plays an important role in the proper functioning of the market economy and in the economic field both at home and abroad.Over the past two years,a new phenomenon has emerged in the audit industry: audit firms that have recently entered the securities services industry are often engaged to audit *ST(delisting risk warning)companies.,which affects the healthy development of the CPA profession.This paper conducts an extensive search and compilation of previous research on audit failure,and summarises the research results of domestic and foreign scholars on three aspects of audit failure detection,causes and prevention.Adopting a case study approach,this paper attempts to find out the reasons for the frequent audit failures of *ST companies by new entrant accounting firms from the case of "*ST Meishang" and to draw valuable insights from it.By examining the performance and deficiencies of Zhong Tian Hua Mao CPA Firm in the engagement,risk assessment,risk response and quality control review procedures,this thesis has reached the following conclusions:(1)The causes of audit failure at the CPA firm level are insufficient prudence,undertaking high-risk *ST projects;insufficient independence,suspicion of purchased audit opinions;insufficient competence,failure to identify new fraudulent techniques.(2)At the regulatory environment level,the synergy between auditing standards and delisting requirements is weak,as invalid audit opinions under auditing standards do not directly trigger delisting requirements;change of registered address is slow and disclosure of cases cannot be followed up in a timely manner;the threshold for accepting *ST engagements is low,and new CPA firms directly accepting *ST audit engagements are not commensurate with their experience and capabilities.Based on the above analysis of the causes of Zhongtian Huamao’s audit failure of *ST Meishang,and in conjunction with relevant laws,regulations and institutional documents,this paper distills the relevant lessons:(1)for accounting firms,they should maintain sufficient caution under the new normal of the epidemic,prudently judge whether to undertake high-risk business and gradually accumulate experience from low-risk business;they should pay more attention to maintaining audit independence under the strict regulatory environment,establish In a strict regulatory environment,we should pay more attention to maintaining audit independence,establish standardized operating procedures,realize independent control of personnel at different levels,and improve the system of authority and responsibility.(2)At the level of the regulatory environment,delisting regulations should be refined in accordance with auditing standards,communication among relevant departments should be strengthened,and synergy between laws and regulations should be enhanced;for listed companies that have changed their registered address,attention should be paid to their motives,information should be tansferd as soon as possible,and the regulatory interface should be optimized;finally,for *ST companies,qualification requirements for auditors may be raised.Finally,for *ST enterprises,the qualification requirements for auditors can be raised or accounting firms with high credibility and matching capabilities can be randomly assigned to improve the auditing business of *ST enterprises.It is hoped that the above findings will serve as a reference and guide for the development of the CPA profession.