A Study on Audit Failures by Certified Public Accounting Firms

Audit failure occurs when certified public accountants (CPAs) fail to disclose significant misstatement risks in the audit report. Such failures frequently lead to various degrees of social harm. Therefore, it is crucial to investigate the causes of audit failures to address these issues fundamentally and prevent their occurrence from different angles. This paper examines audit failures from four perspectives: chaotic audit pricing, inadequate audit preparation, substandard CPA audit competence, and insufficient supervision of auditors. It proposes specific methods to reduce audit failures, including optimizing pricing, enhancing pre-audit preparations, refining audit procedures, and improving audit supervision.