CPA Audit Risk Measurements And Avoiding Under The New Standard

It is well known that the western CPA profession has already stepped into a stage of lawsuits "exploding" since the sixties of the 20th century. Since the country restored the CPA system in 1981, a series of discoveries of corporate fraud and audit failures has happened one after another. After entering 21st century, the supreme people's court issued A letter on dealing with civil infringement cases caused by the false representation in the securities market and The regulation relating to trying the civil lawsuits caused by the false representation in the securities market, which aroused the general concern on audit risks.Since the International Auditing and Assurance Standards Board (IAASB) promulgate standards on auditing risk in 2003, many other countries followed the lead of it such as America and England. Acclimating the tread of identical international standards of auditing, after sending position paper in October, 2004, the new system of standards on auditing was promulgate in Feb. 15, 2006. Adopting auditing mode conducted by modern risk, this system breaks conditional standards of auditing.Studying the theory of audit risk, not only promotes its own development, but also promotes the development of other audit theory, which in turn guides the practice of auditing better. Though the research of the audit risk, auditors could know various kinds of factors that may result in audit risks, then take effective measures to control audit risks, finally promotes the healthy development of CPA profession. On the basis of practical problems, this paper mainly adopts normal research method, and the author tries to do a systemic studying on CPA audit risk.The first section of this paper discussed fundamental principle of auditing risk of Certified Public Accountants (CPA). Began with concept of auditing risk; this paper expanded the extension of it from the probability of non checked weighty error to the probability of CPA's actual loss because of non weighty error. Then, this paper discussed the character of auditing risk on CPA, compared with foreign auditing risk mode.The second section was a further understanding of theory of auditing risk on CPA. Firstly, put forward the groundwork of auditing risk on CPA should be responsibility of auditing, and then analyzed relationship between auditing risk and auditing quality. Further more, this paper dissertated with the momentous breakthrough in measure auditing risk, brought by implementing the new standards of auditing.The third section analyzed and promoted ways to measure auditing risk under new standards. On the base of comprehended framework of analyzing auditing risk mode, analyzed the new system of standards of auditing risk; found auditing risk mode according to the risk feeling of auditing main body and expatiate its exercise. Expect to inaugurate a new thinking of quantitative analysis in auditing risk which added Game Theory into study of auditing risk. This section played as an important role in this paper.The last section is about thinking and advice on elusion auditing risk under new standards. Consequently, analyze various factors that have impact on auditing risk on CPA and then adopt corresponding measure to elude risk.