Study On The Evaluation Method For Audit Risk

With the setting-up of the market economic system in our country, the role of audit in economic activity is more and more important. People have a deeper and deeper recognition and understanding of audit. At the same time, higher expecting to audit has caused the responsibility and risk of audit to increase. How to analyze audit risk in the quantitative method to improve the integral level of audit work is becoming an important subject for us. At present, the research of audit risk still stays at qualitative analysis of expect audit risk, inherent risk, control risk and detection risk. There are no special theory frameworks or instructions to give a method for evaluating these risks, there is also a serious habit-forming in notarizing expect audit risk and too much personal subjectivity in notarizing inherent risk, control risk and detection risk. The audit work is always terminated according to leader's judgment. All the questions described above increase the risk level of auditing and cause poor audit quality. The only way to solve these problems is to find a new method for evaluating audit risk, which can lower the audit risk and raise the quality of audit. At the beginning of the thesis, the audit risk models and audit risk evaluating methods are summarized, and then the problems of some current audit risk evaluating methods are analyzed. After researching some common qualitative evaluating methods of audit risk, the influencing factors of audit risk evaluation are specified and an assessment index system of expect audit risk, inherent audit risk, control audit risk and detection audit risk is set up on the basis of audit theory and assessment theory. Then the thesis gives a quantitative evaluating method system in audit risk and total audit risk model. Furthermore, the standard of terminating audit work is given, that is, when expect audit risk is higher than total audit risk, audit work is terminated; otherwise the audit work should be continued through adding sample quantity to reduce inspection risk, then making total audit risk lower than expect audit risk. At last, Dragon Transport (Groups) Limited Company of Heilongjiang Province testifies the method presented, through which the problems of audit risk in our country are analyzed, and the relevant countermeasures are brought forward. The result proves that the assessment system realizes the original design target and has practical value to some extent.