Analysis of Enterprise Audit Failure Issues: A Case Study of Guangdong Rongtai's Audit

Shiyuan Li

doi:10.62177/apemr.v2i5.808

Authors

Shiyuan Li Xi'an Polytechnic University

DOI:

https://doi.org/10.62177/apemr.v2i5.808

Keywords:

Audit Failure, Professional Competence, Audit Procedures, Professional Skepticism

Abstract

In recent years, cases of audit failures have occurred frequently, causing significant losses to auditing firms, investors, and enterprises, and damaging the credibility of the auditing industry. This paper takes the audit failure event of Guangdong Rongtai Company as a case study. By analyzing this case, it points out that the audit failure was due to the insufficient professional competence of the certified public accountants (CPAs), their failure to maintain due professional skepticism, unreasonable audit procedures, and fraud by the management of the audited entity. Accordingly, suggestions for preventing audit failures are proposed, including that CPAs should strengthen their professional skills, adhere to professional skepticism, enhance the supervision of audit procedures, and enterprises should strengthen internal management to reduce the occurrence of audit failure cases.

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