Study On Audit Risk Of Listed Companies In The Steel Manufacturing Industry

The manufacturing industry has always played an important role in the country’s economic development,of which the steel manufacturing industry is an important part.By December 2021,there are more than forty listed steel manufacturing companies in our country.Especially in the context of reform and opening up,our country has vigorously developed heavy industry,including steel.After the development of the industry has entered a mature stage,in the context of the new era,the development of the industry has encountered a bottleneck.Due to the increasingly obvious environmental pollution problems and the lack of technological breakthroughs in the development of the iron and steel manufacturing industry,small iron and steel enterprises have gradually withdrawn from the market under the influence of policies.As the overall development of the steel industry has been greatly impacted,and the entire industry is facing severe challenges.At the same time,the central government has proposed supply-side structural reforms,and the steel industry is facing problems such as overcapacity and financing difficulties.In this context,enterprises often resort to improper means to whitewash financial statements and conduct financial fraud in order to obtain financing and obtain more profitable profits.Although the China Securities Regulatory Commission has become more and more strict in the supervision of such events,many listed companies choose to turn a blind eye and take risks for their own interests.A series of reasons,such as the imperfect internal control system of the company and the failure of accounting firms to maintain due prudence in auditing,have also led to the continuous occurrence of financial fraud,which has greatly increased the audit risk of iron and steel manufacturing enterprises and the possibility of audit failure.Therefore,by analyzing the industry situation of the iron and steel industry,combined with the fraud case of Fushun Special Steel Company,this paper aims to explore how to deal with the challenges faced by the current audit of iron and steel enterprises.This paper adopts the method of combining literature research and case study,and is based on fraud risk factor theory,information asymmetry theory,and audit risk model theory.Starting from the financial fraud case of Fugang Company,analyze the reasons and means of the fraud.From the perspective of external audit,analyze the material misstatement risk and inspection risk at the financial statement level and the recognition level of iron and steel enterprises.Analyze the risk points and propose preventive measures.The research conclusions of this paper are as follows:(1)Steel manufacturing companies generally have the characteristics of high asset-liability ratio and high proportion of inventory.Accounting firms should pay special attention to this before undertaking business and when conducting audits.(2)The fraud of Fushun Special Steel is typical,mainly including falsely reporting inventory,falsely increasing construction in progress,falsely reporting fixed assets,falsely reporting depreciation,falsely reducing the cost of main business and adjusting profits at will.etc.(3)The certified public accountants did not have due professional doubts when auditing,believed too much in the audit results of previous years,and performed routine audit procedures.The professional quality of auditors should be improved.When conducting audits on special enterprises such as the steel industry,they should know whether the internal control system of the company is complete,maintain professional suspicion at all times,and improve the quality of audit work.This paper aims to summarize the financial fraud methods and possible audit risks of such enterprises through the research on audit risks of iron and steel enterprises,so that the firm can understand the fraud methods of iron and steel enterprises in the process of audit work,and adjust the key direction of audit in a targeted manner.,to improve the efficiency of audit work,so as to better reduce the occurrence of financial fraud.