Research Article of International Journal of Industrial and Business Management
Analysis of reasons for audit failure and study of preventive strategies
School of Economics and Management, Huainan Normal University, Huainan 232001, China
Using 2007-2017, securities regulatory commission announced on the administrative penalty, penalty and certified public accountant firm in the audit failure penalty as the research sample, respectively, from the audit failure of violating the frequency of the auditing standards, registered public accounting firm scale and the relationship between the financial fraud and audit failure three aspects to discusses the reasons of audit failure. It is found that “audit evidence” and “verification” account for a large proportion of audit failures. There is a positive correlation between the size of firms and audit quality, and the proportion of audit failures in “big firms” is low. There is no correlation between financial fraud and audit failure. , In view of the reasons for the audit failure, this paper puts forward some preventive strategies. ,
Keywords: audit failure; Auditing standards; Firm size; Financial fraud
How to cite this article:
Song Longfei.Analysis of reasons for audit failure and study of preventive strategies. International Journal of Industrial and Business Management, 2019; 3:9. DOI:10.28933/ijibm-2019-01-0208
1. zheng zhaohui. Analysis and investigation research on ten management fraud cases of listed companies [J]. Audit research, 2001(6):22-24.
2. Chen xi. Analysis of reasons for audit failure and preventive measures [J]. Oriental corporate culture,2012(11):92-93.
3. De Angelo, L.E. Auditor Size and Audit Quality[J]. Journal of Accounting and Economics.1981 (03) : 183-199.
4. Chen hanwen, wang hua, zheng xincheng. Andersen: events and reflections [M]. Guangzhou: jinan university press,2003.35-51.
5. ma LAN, wang yanming. Business failure, audit failure and audit risk — analysis of experience from suspended listed companies’ annual audit reports [J]. China certified public accountant,2003(03):23-25.
6. li ruoshan. Audit failure and COSO report — on enterprise innovation and internal control changes [J]. Audit and economic research, 2005 (02) :3-7.
7. li ping, wang xiaomin. The status quo of audit failure of listed companies and preventive measures [J]. Economics and management.2014(9) : 8-9.
8. li mochou. Audit standards and audit failure — based on the scores of administrative punishment announcements made by China securities regulatory commission over the years [J]. Audit and economic research,2017(02):1-10.
9. liu hongyu. On the audit failure of CPA [J]. China foreign capital,2012 (21) :181.
10. ding hongyan, audit failure and its consequences — an analysis based on the punishment announcement of China securities regulatory commission from 2006 to 2010 [J]. Journal of ocean university of China, 2013 (1) :62-67.
11. long xiaohai, zhang yuanyuan. Scale and audit quality of accounting firms — an empirical study based on the branches of accounting firms [J]. Journal of nanjing audit university, 2016 (05) :92-105.
12. wu shuang. On the characteristics of audit standards 2006 and its impact on audit practice [J]. China management informatization.2010(7):45-49.
13. zhang shengli. Does the new auditing standard improve the auditing quality? Journal of shanxi university of finance and economics.2011(8):108-114.
14. Cho,Chansog Kim ,Jeong-Bon Kim,and Zang .Audit Office Size ,Audit Quality,and Dudit Pricing[J].Auditing:A Journal of Pratice&Theory,2010,29(1):73-79.
15. FRANCIS J R，YU M D.Big 4 Office Size and Audit Quality［J］．The Accounting Review，2009(84): 521-1550．
This work and its PDF file(s) are licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.