Factors Affecting Audit Independence: A Case Study Based on the Failure of Typical Financial Fraud Audits

Abstract

Audit independence constrains the work of auditors and provides certain guarantees for the quality of audit execution. Audit independence is affected by various factors, such as the development of non-audit services, the completeness of audit procedures, and the auditors' competence. This paper takes the typical audit failure cases such as the Enron incident, the Zhenlong audit failure, and the financial fraud audit of Kangmei Pharmaceutical as examples, and conducts a case analysis on the influence of different factors on audit independence in these audit failure cases. The conclusion shows that strengthening audit independence should be done by improving the service quality of firms, the professional competence of certified public accountants, the engagement mechanism and external supervision.