Research On Audit Risk Evaluation Model In Strategic Perspective

The grasp and control of audit risk has been a major issue of auditing profession, especially in today's society, medium of exchange are innovating continuously, auditing business are diversification, accounting becomes more and more complex, additionally, relevant laws and market rules are not perfect, speculation phenomenon and book fraud occurs constantly, so, audit findings often deviate from actual situation, audit risk increases consequently.The traditional audit risk model plays a guiding role in CPA's auding works to some extent, but in today's economy that conflicts are arising and complexing, the application of the model becomes stretched. The traditional audit risk model didn't consider what is behind the financial statements in depth, did not understand the enterprise and its environment in macro level, and did not give a fully consideraion of audit risk factors. It confined to the audit process and the object that being audited, so, such model is incompatible with contemporary socio-economic development.The new audit risk model that under strategic perspective is expressed as Audit Risk= Material Misstatement×Detection Risk. Such model is a new model that uses the strategic perspective and thinking, and draws on the strategic management approach. It gives a total consideration of all factors that impacted on audit risk, not just the risk of transactions and account balance levels. The new audit risk model focus on analysis of the audited enterprise's external environment, goals and strategy, it extends the audit perspective to business environment, development strategy, corporate governance structure, and consistents with the meaning of strategy.This paper discusses the theoretical background, application framework, strategic relevance and the characteristic of new audit risk model, especially on material misstatement that constitutes to it. At the end of the paper, we make further information on application of the new audit risk model and pointed out the the necessity and the development of this model in our country.