A Case Study Of ZX Accounting Firm’s Lack Of Professional Skepticism On LP Company

The new version of the Basic Standards for Assurance services of Chinese Certified Public Accountants clearly states that “certified public accountants should plan and implement assurance services with professional skepticism,and obtain sufficient and appropriate evidence about whether there is a material misstatement of the information about the assurance object".With the rapid development of China’s capital market,the means of fraud have become increasingly complex,and the number of audit failures has also increased.This not only brings serious reputation losses to accounting firms and the entire industry,but also causes small and medium-sized shareholders to make inappropriate decisions due to the use of incorrect information.In this context,exploring the causes of audit failures has become crucial.According to the administrative penalty announcements publicly disclosed by the China Securities Regulatory Commission in recent years,most audit failure cases are closely related to the lack of professional skepticism.At present,there is a large number of relevant literature on audit failure research in China,and the reasons for audit failure have been explored and analyzed from multiple aspects.However,there are not many scholars who focus their research on professional skepticism,and related research is still relatively scarce.Therefore,conducting in-depth research from the perspective of professional skepticism can not only fill the current gap in relevant research in China,but also help certified public accountants better maintain professional skepticism in practice.It has long-term significance for studying the reasons for audit failure and avoiding the risk of audit failure.This article starts from the case of ZX Accounting Firm auditing LP company,reviews relevant literature from domestic and foreign scholars,combines information asymmetry theory,risk-oriented theory,and principal-agent theory,and conducts research through literature analysis and case study methods to explore the specific manifestations of registered accountants’ lack of professional skepticism.Firstly,they fail to control their behavior during the letter confirmation and interview process.Secondly,they fail to control their behavior in sales,logistics and the equipment disposal process effectively implemented audit procedure.Thirdly,they did not detect the abnormality of R&D,and fourthly,it was negligent in identifying the relationship between related parties.The reasons for the above-mentioned negative performance include: inadequate audit quality control of accounting firms,inadequate risk assessment,insufficient professional skills of auditors,and continuous auditing leading to a lack of independence for certified public accountants.Finally,the following countermeasures and suggestions are proposed on how to avoid the lack of professional suspicion in the audit process: firstly,to strengthen the quality control of audit firms;secondly,strengthen the evaluation and control of audit risk;thirdly,the professional level of certified public accountants should be improved;fourthly,to enhance the independence of certified public accountants.The above case studies can ultimately provide certain reference value for similar cases or practices in the future,reducing the occurrence of audit failures due to lack of professional suspicion.