How Does Operating Pressure “Penetrate” Risk Identification? The Latent Transmission of Accounting Misstatements and Audit Failure in ST Dongtong

Yuxin Tu

doi:10.54691/zz0h8c48

Authors

Yuxin Tu Business School of Chengdu University of Technology, Chengdu 610059, China

DOI:

https://doi.org/10.54691/zz0h8c48

Keywords:

Audit Failure; Professional Skepticism; Fraud Triangle Theory.

Abstract

We studied the audit case of ST Dongtong using the fraud triangle model and professional skepticism. The company faced severe operating pressure. This led them to adjust several difficult areas like revenue, R&D capitalization, asset impairment, and subsidies. It was a package of linked adjustments, not one single item. The audit team did not actually skip their checklist. The issue was they did not connect the dots. They took formal files at face value and skipped comparing them to actual cash flows, post-balance events, or basic business trends. By not cross-checking, they lost their skepticism. Auditing high-risk clients means connecting small anomalies. Firms should run deeper checks and know the specific sector to make realistic calls.

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