The reason why Zhongzhong Zhujiang failed to audit Kangmei Pharmaceutical

The reasons why Genzon Zhujiang failed in its audit of Kangmei Pharmaceutical are as follows:

The reasons why Genzon Zhujiang failed in its audit of Kangmei Pharmaceutical mainly include the following aspects:

Lack of effective audit independence: In the Kangmei Pharmaceutical incident, the auditors of Genzhong Zhujiang were closely related to the management of Kangmei Pharmaceutical, resulting in serious damage to the audit independence. This made it impossible for auditors to objectively evaluate Kangmei Pharmaceutical's financial status and operating results, which led to audit failure.

Lack of necessary audit procedures: During the audit process, Genzhong Zhujiang did not implement necessary audit procedures, such as detailed analysis and evaluation of Kangmei Pharmaceutical's financial statements and interviews with relevant personnel. This prevented the auditors from discovering the financial problems of Kangmei Pharmaceutical in time, thus missing the opportunity to prevent financial fraud.

Lack of attention to audit risks: Genzhong Zhujiang did not fully assess the possible audit risks of Kangmei Pharmaceuticals during the audit process, such as management fraud, inflated income and assets, etc. This resulted in auditors not paying enough attention to these issues, leading to audit failure.

Lack of compliance with relevant regulations and ethical standards: During the audit process, Genzhong Zhujiang’s auditors did not strictly abide by relevant regulations and ethical standards. For example, when auditing certain major transactions of Kangmei Pharmaceutical, sufficient disclosure and explanation were not provided in accordance with relevant regulatory requirements. This not only violates regulatory requirements, but also damages the credibility of the audit.

To sum up, the reasons for the failure of Genzhong Zhujiang’s audit of Kangmei Pharmaceutical mainly include the lack of effective audit independence, the lack of necessary audit procedures, the lack of attention to audit risks, and the lack of understanding of relevant regulations and ethics. Compliance with standards. In order to avoid similar incidents from happening again, it is necessary to strengthen the supervision of accounting firms and auditors, improve their independence and professionalism, ensure that they implement strict audit procedures, fully assess audit risks, and comply with relevant regulations and ethical standards.