On the CPA Audit Failure Causes and Countermeasures 英语论文.doc

on the cpa audit failure causes and countermeasuresabstract: cpa audit failure is prevalent in the audit practice and very serious problem, and also contributed to the practice of accounting firms and associated persons to take up the responsibility of the main reason for the audit. in this paper, reference cases, analyzes the causes of audit failures and proposes specific measures to resolve it. key words: audit risk; professional discretion; audit procedures; audit responsibilities audit failure is the extreme case of audit risk that practitioners did not comply with auditing standards and professional discretion to form or make a wrong audit opinion, the information the user accordingly made the wrong judgments or decisions, and therefore requiring accountants service and signature of the cpa held accountable. i. analysis of the causes of audit failures 1. the lack of audit independence according to the world communications april 22, 2002 to provide a call for the right to vote statement (proxy statement), arthur andersen and worldcom in 2001 collected a total of 16.8 million u.s. dollars in service costs, of which 4.4 million u.s. dollars audit fees, tax, consulting 7.6 million u.s. dollars, non-financial statement audit (mainly outsourced internal financial audit) 160 million and other advisory services to 3.2 million u.s. dollars. since 1989, arthur andersen has served as worldcoms auditor until the enron scandal, the world communications only in the may 14, 2002 dismissal of arthur andersen, kpmg employed instead. andersen not only in the past 10 years, communications around the world providing audit services, to provide consulting services. although so far there are not sufficient evidence to prove that the authority also provides audit and consulting services accounting firms could undermine the independence, but the july 30, 2002 adopted the sarbanes - oxley act accounting and internal to the agent 9 consulting services and auditing made prohibitions as well as tax advisory restrictive regulations made, or at least explain the public and the legislature also offering auditing and consulting could undermine the independence of the concerns. in addition, worldcom has always been the arthur andersen jackson, mississippi (the worlds communications headquarters) branch of the most valuable single customer, this fact can not help but have doubts about the independence of arthur andersen. jackson branch of the established purpose is to wait and keep the worlds communications that bring a lot of money to the arthur andersen auditing and consulting income customers. this case, the jackson branch of the arthur andersen partner in global communications will inevitably have a non-standard accounting treatment to be accommodating. the trial of the world communication partner, the loss of such a large customer, the consequences are unimaginable. 2. the audit process failed to maintain proper professional care and professional doubts kelon electrical problems, the cpa is obvious dereliction of duty. if the cpa can be in strict accordance with the relevant system of due diligence work, to make judgments based on the principle of prudence audit, then the so-called myth kelon will not last so long, kelon legend can not be confused so many people over such a long time, even a china central televisions annual economic figures, impact and misled many people. therefore, from the role of subjective or objective reality point of view, the event went kelon now this way, the cpa did not fulfill their duties, is indisputable. gu chujun financial maneuvers tricks, huge capital flows and sources, under the conditions of modern technology in the accounting statements can not but leave traces. inter-bank deposits and loans, related accounts exchanges, the financial can not be unaware. informed rather than genuinely truthful information and early warning information on not only the dereliction of duty, as well as suspected of dereliction of duty, which greatly damaged the interests of investors, it also undermines the enterprise and the state long-term interests. 3. the audit process, there are many deficiencies in the implementation of the auditing standards require that a registered accountants in private practice, and should maintain the attention they deserve. the object should be implemented to audit risk assessment process. especially for certain specific audit content, key program can not be omitted, but in the silver guangsha conduct annual audit, certified public accountants over-reliance on the audited units to provide audit information. no evidence of the crucial evidence in person. such as accounts receivable, bank deposits, the audit procedures used circularization. required by auditing standards, xunzheng han, as well as the establishment and send replies. certified public accountant should be himself. however, in actual operation, cpa puts xunzheng han handed over to the audited units issued by an accounting firm and then gave them back, which is being audited unit forged circularization results provide a convenient, this procedure to obtain the external compromised the authenticity of audit evidence, circularization meaningless. in the silver guangsha incident, the practice of certified public accountant is not strictly enforce the necessary audit procedures, resulting in the audit failure. 4. auditors have violated the code of ethics, provision of false audit reports shanghai qin industry accounting firm of a registered accountant in the march 2, 2006 -2,006 years, march 8 7 days period of time, issued 166 copies of the content of false verification report, the shanghai xing in the accounting firm of a registered accountant in 2005, june -2,005 years in september, for 68 units of a significant false verification report to verify the registered capital of 86.13 million yuan, have dried up registered capital of 68 units have been illegally registered. constitutes a grave violation of the cpa code of ethics, causing huge losses to investors, resulting in the audit failure. reposted elsewhere in the paper for free download http:/ second, specific measures to resolve the audit failure 1. kejin due professional care is the key to preventing audit failure audit failure generally refers to the absence of certified public accountants to comply with generally accepted auditing standards and the serious misrepresentation of the financial statements the wrong audit opinion. in reality there is another phenomenon, namely, certified public accountants to comply with the auditing standards, but it made a wrong audit opinion, this is called audit risk. as the extensive use of modern audit sampling techniques, audit risk is inevitable, but as long as the process strictly followed in the practice of independent auditing standards, kejin due professional care, the audit failure can effectively prevent and avoid. the united states has long been clearly put forward the audit criteria for certified public accountants audit the financial statements of responsibility found in the report could lead to inaccurate financial statements of a serious error and fraud audit responsibilities. certified public accountant, if not strictly follow the requirements of auditing standards, so that failure will lead to inaccurate financial statements of a serious error and fraud exposed, they constitute the audit fails, the fault should bear the responsibility of the corresponding. this measure, ernst & young failed to identify the south as much as 25 billion dollars in health care profits has long been a virtual black holes and the phenomenon of surplus real loss, no doubt was a standard audit failure. the disclosure of information from a look at the face of a number of significant financial early-warning signals, ernst & young has lost every time careful handling. the most typical is the ernst & young has gone so far as much as 300 million u.s. dollars in cash inflated unaware, can not help but care for their basic job very much. maintain a high degree of professional discretion can help cpas quickly discovered the problem, capture cuobi clues to improve audit efficiency, so that audit work more efficiently. on the contrary, if it can not maintain due professional care, even if the step by step implementation of all the established audit procedures, the audit is still not efficient or even ineffective, audit quality is also out of the question. at this point, the ernst & young and arthur andersen have been a lesson for the fallen. with the audited units wits game process, professional discretion is always the basic survival of certified public accountants law. two. strict implementation of the audit process, the key program can not be omitted guangxia fraud case, of course, should bear the primary responsibility for the management, but excessive reliance on cpa audited units of accounting data is also a guangxia audit failures of the important reasons. certified public accountant in the implementation of the circularization process accounts receivable, if the letter can be personally and personally receive the audit replies, we can identify a false business records enterprise, we can avoid an audit failure. but the cpa on the contrary, the issue xunzheng han to recover by the implementation of the audited units. provided false information to its opportunities. the case reminded the audit staff, and the necessary audit procedures can not be omitted, in particular, is the key audit procedures must ensure that its implementation of the normative in order to obtain a valid audit evidence, in order to fully support the audit findings. 3. increase the punishment of counterfeiting the audit, strengthening of certified public accountants professional ethics education by the relevant supervisory departments should increase efforts to curb non-compliance penalties for false audit took place, forcing practicing certified public accountant with caution so as to enhance business integrity; the same time, should improve accountability mechanisms, will be responsible for implementing the individual; establishment of a civil compensation mechanism, so that irregularities in accounting firms is far greater than the cost of illegal earnings, provide true, accurate audit reports is a registered accountants audit responsibilities. shanghai qin industry and xing in violation of code of ethics for certified public accountants. without strict compliance with the audit process, but according to the requirements of the audited units. caused a false audit reports issued by audit failure. therefore, the strengthening of certified public accountants professional ethics education is the key to ensuring the quality of audits. 4. to strengthen industry regulation, and avoid vicious competition accounting firm is currently intense competition, professional division of labor is not obvious. the accounting firm in order to survive in business on the next, regardless of professional competence, does not consider the audit risk. in order to obtain the audit costs and even cut-throat competition and helped the audited units issuing false audit reports. in order to avoid the occurrence of such incidents, regulators should be equipped with the auditors or trade evaluation. consider the accounting firms strengths and weaknesses of the industry access to the system and evaluation criteria. jiangyoufalie truly survival of the fittest, the principle of good faith accounting firms lose eliminated. gradually developed with industry characteristics. clear division of labor. orderly competition. a high degree of integrity cpa audit system for the information users provide fair audit information. 5. clean environment, and improve the quality of information being audited units audit object is inseparable from the audited units of accounting