Study On The Financical Statements Audit Risk Analysis And Prevention

Audit risk is related to the execution of the certified public accountant (CPA) and the development of accounting office. The environment of audit execution is very bad,the quality of audit business is very low and the potential audit risk is high in China. With market economic more perfect and influential area of audit report more large,lawsuit risk confronted by auditors is increasing. And factors of audit risk become more complex. So it is of important current significance to deeply study audit risk and set forth some ways of prevention.In the paper,audit risk is educed by economic analysis of financial reports' audit target and audit risk researched here is the risk faced with during the whole audit work,including the risk of the client and its business environment. Secondly,establish the audit risk model,analyze the composed elements of audit risk and study their assessment methods. Auditor may assess the accepted audit risk in the blur integration assessment method,evaluate inherent risk in the risk factors analysis method,value control risk in the internal control assessment method,estimate detection risk in the audit risk model method. Integrating the Leshan Electric Power Ltd. 2001 -mid reports audit case,it is stated how to assess these risk. Thirdly,analyze audit risk with the game theory from the two angles of CPA and administrative authorities and CPA and supervisory institution,and research how to determine the received audit risk and study the factors which affect the determination. Lastly,discuss in detail how to control the audit risk and put forward some proposals of prevention based on the present situation of China's CPA industry.