Research On The Audit Quality Improvement Of Accounting Firm Under Strict Supervision

At present,China’s capital market supervision system is becoming more and more mature,but financial fraud events are still emerging in endlessly.Bad financial fraud makes the business environment of the firm worse and the social credit lower.In recent years,the state has continuously revised and issued a number of industry related laws and regulations,and the judicial supervision has been continuously strengthened.The legal liability risk of the firm has increased significantly.At the same time,the regulatory authorities attach great importance to the improvement of the audit quality of the firm,and issued audit quality management standards.In the current strictly supervised social environment,if the certified public accountants fail to be diligent and responsible in the audit process and issue false audit reports,they will lead to audit failure,bring losses to investors and be punished by law.Therefore,the strengthening of judicial supervision will force accounting firms to strengthen audit quality control,promote audit quality improvement,attach importance to audit quality management,improve audit quality,and also fundamentally reduce legal risks.Based on the principal-agent theory,audit expectation gap theory,deep pocket theory and reputation mechanism theory,this paper makes a deep analysis of the current situation and problems of audit quality management of China’s current accounting firms in combination with cases,and advocates that the increase of legal liability will promote the audit quality of accounting firms,attach importance to audit quality management,reduce litigation risk,and propose to deal with legal risks from both the accounting firms and the external environment,Suggestions on strengthening audit quality improvement.First of all,from the perspective of social credit environment,judicial supervision and current national requirements,this paper proposes that it is of theoretical and practical significance to study the improvement of audit quality of firms under strict supervision,and summarizes the relevant literature search results.Secondly,it analyzes the current situation of audit quality management of China’s accounting firms,analyzes the problems existing in the strengthening of system supervision,department supervision and legal liability,and proposes the improvement path of audit quality from both internal and external aspects.It should be noted that although the punishment of joint and several liability in the current situation of civil liability reflects the requirements of "strict supervision",there are also excessive liability and improper punishment,which need to be further refined and improved through subsequent legal provisions.Thirdly,based on the basic information of financial fraud in the case,this paper analyzes in detail the improper audit behavior of certified public accountants in the whole process of implementing the audit procedure before,during and after the event,and puts forward corresponding improvement suggestions for the audit quality problems in the case.Finally,based on the previous theory and case analysis,the basic conclusions are drawn:First,audit quality and the legal liability of accounting firms interact.The growing legal supervision urges firms to actively strengthen audit quality management under the pressure of maintaining professional reputation and illegal litigation risk.Secondly,the audit quality problem runs through every link of the audit activity.The audit quality improvement should be carried out in aspects,so that the internal and external factors can work together to form a joint force,and the audit quality should be improved from the three aspects of the accounting firm,the audited unit and the external environment.Accounting firms should strengthen quality management.The relevant standards and application guidelines for audit quality management are an effective way for accounting firms to establish a quality management system.Auditors should always adhere to the concept of risk orientation in their audit activities,do the whole process management before,always and afterwards from the firm level and project level,and jointly create a good industry development environment with external auditees and national judicial supervision.Thirdly,our country still needs to improve the system supervision and legal liability provisions of the certified public accountant industry.We should speed up the revision of relevant systems and regulations,improve the audit supervision system and legal liability system and regulations,promote the construction of consistency of laws and increase the legal punishment,but we should pay attention to the rationality of legal liability,and actively promote the equivalent mechanism of excessive civil liability.