The Ministry of Finance of China and the China Securities Regulatory Commission (CSRC) recently imposed penalties on a company for not disclosing major litigation records as required. To crack down on financial and audit fraud, auditors must be vigilant and ensure that every aspect of the audit process is flawless.

In today's strict regulatory environment, litigation search has become an indispensable part of the audit process. Auditors should conduct a comprehensive litigation inspection to uncover potential violations, hidden and contingent liabilities of the company, evaluate its ability to continue as a going concern, and ensure the accuracy and completeness of the audit report.

Failure in the audit process may face serious criticism and fines from regulatory authorities, seriously affecting the reputation of the firm, and may even lead to business losses. Investors may also hold auditors accountable for audit failures, further increasing the legal and financial risks for auditors. Only with a comprehensive due diligence can auditors eliminate risks.