Avoiding Audit Failures - A Case Study of Xintai Financial

Abstract

In recent years, financial fraud cases have been on the rise, with a combination of subjective reasons within companies and audit failures caused by negligence on the part of accounting firms. This paper examines the case of audit failure at Xintai Financial to understand how companies engage in financial fraud through illegal means, manipulate financial statements, and highlights the shortcomings of Beijing Xinghua Accounting Firm in their work, which contributed to the success of Xintai Financials financial fraud. In conclusion, three insights are drawn to provide lessons for the future on how to prevent audit fraud effectively.