A Case Study On Audit Failure Of Guangzhou Langqi

In recent years,there have been frequent cases of management fraud in listed companies,and the scale of financial fraud has been constantly refreshed,seriously endangering the healthy development of the capital market and the interests of small and medium-sized investors.Under the influence of the concealment and complexity of management fraud,accounting firms issued inappropriate audit opinions,which led to the failure of Audit risk control,and the CPA industry faced a serious crisis of public trust.The audit failure cases of Guangzhou Langqi have a certain representativeness in the industry,so this article selects Guangzhou Langqi,which has failed audits for four consecutive years and inflated profits by tens of billions,as the research object,and uses case analysis and comparative analysis methods to carry out research work.The research purpose of this article is to identify the main means of fraud in Guangzhou Longqi,analyze the reasons for the company’s audit failure,and provide reference suggestions for audit work.In order to promote the improvement of audit quality and reduce the possibility of audit failure,this article takes the failure case of Guangzhou Langqi audited by China Audit Zhonghuan as the research object,and uses theoretical analysis and case analysis methods to deeply analyze the problems encountered by China Audit Zhonghuan in providing audit services to Guangzhou Langqi.Firstly,the literature research method is used to summarize and analyze the achievements of relevant research both domestically and internationally.Then,an analysis was conducted on the issues of audit failure in Guangzhou Longqi,mainly from internal factors,intermediary agency factors,and the harm caused by audit failure.It was found that Guangzhou Longqi had problems with its corporate governance structure and had issues with concealing and providing false financial data;However,Zhongshen Zhonghuan Certified Public Accountants,which is responsible for auditing,has major problems in analytical review,pre audit risk assessment and implementation of audit procedure.Finally,suggestions are made for the audit failure of Guangzhou Longqi,including adjusting the company’s governance structure,strengthening the verification of the authenticity of internal information,strictly implementing the correct inventory counting procedures,strengthening the punishment for letter failure,and strengthening the audit of the fairness and necessity of related party transactions.This article aims to provide some reference significance for listed companies and certified public accountants by studying this case,reduce the possibility of audit failure,and also have certain practical significance for maintaining the healthy development of the capital market and improving the fairness of audit opinions of accounting firms.