A Case Study on Audit Failure of Accounting Firm

Abstract

CPA audit, government audit and internal audit are all ways to supervise the operation and management of enterprises. Among them, CPA audit is a common way of external supervision. By issuing audit reports with appropriate opinions, CPAs can provide a higher level of reasonable assurance for the authenticity and objectivity of enterprise financial statements, which are of particular concern to the users of financial statements. However, the situation of financial fraud in listed companies is more and more serious, and the frequency of audit failure in accounting firms is also gradually increasing. This makes the public's trust in accounting firms gradually reduced, and the frequent "rollover" or even "thunderstorm" of listed companies also makes the capital market lose its due stability. Accounting firms are in urgent need of some countermeasures and suggestions to improve their audit quality and reduce the probability of audit failure. Taking Ruihua accounting firm as an example, this paper explains the concept and causes of audit failure, analyzes the current situation of the accounting firm industry and Ruihua accounting firm, studies several cases of audit failure of Ruihua, and finally puts forward some countermeasures to prevent audit failure. It provides some reference and suggestions for the audit industry to prevent audit failure.