A Case Study On The Lack Of Professional Suspicion Of CPA

On December 31,2019,the China Securities Regulatory Association(CICA)newly released five questions and answers to audit standards,including answers to professional skepticism.The revised professional skepticism standards emphasize the need for certified public accountants to maintain professional skepticism during the audit process,and provide more detailed guidance on professional skepticism issues and measures.On December 17,2020,the China Securities Association(CICA)issued a newly revised code of professional ethics,with 5 references to professional suspicion in the original code of professional ethics and 28 references in the newly revised code of professional ethics.The newly revised code of professional ethics emphasizes that certified public accountants should maintain professional suspicion throughout the audit process,overcome cognitive bias,and maintain a high degree of vigilance against fraud risks and signs.In recent years,there have been multiple cases of lack of professional suspicion among certified public accountants,even leading to audit failures.According to punishment information statistics,among the 258 cases of punishment imposed on accounting firms,including local securities regulatory bureaus,from 2016 to 2021,81 cases directly mentioned lack of professional suspicion,accounting for 31.40% of the total punishment within six years,and showing an upward trend year by year,It can be seen that the failure of certified public accountants to maintain professional suspicion is an important reason for audit failure.Most of the existing literature in China directly studies audit failure cases,including the causes and countermeasures that lead to audit failure,but it is rarely cut into from the perspective of lack of professional suspicion.Therefore,the research in this article has certain significance in enriching case materials that lead to audit failure due to lack of professional suspicion and preventing audit failure.This article takes the audit of Dongfang Jinyu by DH Accounting Firm as an example to explore the performance of certified public accountants’ lack of professional suspicion towards the audited entity,including a lack of vigilance against abnormal sales data,insufficient suspicion of fraud risks of related parties,ignoring signals that internal control may fail,and failing to carefully evaluate audit evidence related to procurement and sales operations.The reasons for the above poor performance include: lax quality control of accounting firms,deviation in understanding the reasonable boundaries of professional suspicion,excessive trust in the internal control conclusions of the audited entity,and lack of audit independence.Finally,relevant countermeasures and suggestions are proposed for the lack of professional suspicion in audit cases: firms should strengthen quality control,improve the professional suspicion literacy of certified public accountants,strengthen risk assessment and control during the audit process,and attach importance to the cultivation of audit independence.I hope that the above case analysis can enrich the perspective of fraud audit and provide some reference significance for audit failures caused by the lack of professional suspicion of certified public accountants to improve audit quality.