A Case Study Of The Failure Of Zhonghua’s Cross Border Fraud On Yabaite Based On The Audit Conflict Model

With Chinese economy and the world economy highly integrated,more and more enterprises including listed companies,starting from the global industrial chain layout,constantly export high-quality products and services to the international market,which have won the reputation and income from the international market.However,the development of cross-border investment market in China is immature and the relevant regulatory mechanism is not perfect enough,which leads to the supervision of crossborder enterprises lagging behind the development trend of cross-border investment.Moreover,due to the lack of supervision and the inadequate audits of cross-border projects,many enterprises have conducted financial fraud on them,which further caused the audit failure cases,The independence of auditors and the quality of audits have been widely concerned by scholars and investors in the industry.The failure of cross-border auditing has become a common focus of investors.Therefore,the research focus of scholars is to find the reason for the failure.Based on the conflict theory and audit conflict model,this paper studied the game conflict between the auditee and the firm in the audit process,and analyzed the reasons of cross-border fraud audit failure.This paper firstly introduces the definition,influencing factors and preventive measures of audit failure.At the same time,aiming at the research focus of this paper,the concept of cross-border fraud audit failure is defined,and the characteristics of cross-border fraud audit failure are innovatively described.Secondly,based on the theory of audit conflict,this paper improves the audit conflict model.On the basis of this theory,with the help of case analysis of Zhonghua conducting a cross-border fraud audit failure to Yabaite,this paper,starting from the auditor’s point of view,based on the interest conflict between the two parties,the game between the power driving and restraining factors of the management authority and the auditor these four factors,obtained reasons for the audit failure of the auditor.Finally,from auditors and cross-border audit supervision,the author draws the enlightenment on improving audit quality and avoiding the failure of cross-border fraud audit.