Background Analysis On The Modern Risk-based Audit Approach Applied In China

At present, the advancement of modern risk-based audit approach has received recognition from auditing industry both in our country and most other countries. However, this approach came into being and developed in developed countries, so there is a certain background in its generation, development and the practical application. As for China, the background in economy, law, culture and other aspects is not all the same with that in the developed countries, so the background directly influences the application of modern risk-based audit approach in China.First, this paper introduces the origin course of modern risk-based audit, and its content and features; second, it makes a deep analysis on the background of modern risk-based audit's generation and development abroad, mainly consisting of the securities market background analysis, legal background analysis, the auditing industry supervision background analysis, cultural background and personnel quality analysis, and the auditors' independence analysis; third, it focuses on the analysis of the approach's current application background in China such as securities market, law, the auditing industry supervision, culture, as well as personnel quality and auditors'independence, and also makes a comparative analysis with the background of this approach's generation, development and application abroad, so as to discuss the applicability and potential obstacles when modern risk-oriented audit is applied in China; finally, it brings forward suggestions and countermeasures against the obstacles.On the basis.of this paper's analysis, though the background of modern risk-based audit approach application in China is deficient in some respects compared with the developed countries, China has already possessed the basic background to put the modern risk-based audit approach into practice. Moreover, the auditing industry in China has an urgent need for such an advanced audit approach to reduce the auditors'practice risk. We have reasons to believe that under the common efforts and constant exploration from academia, the accounting practice industry, the legal industry and other aspects, with China's social, economic, cultural, scientific and technological continuous development, China will do more and more better in the application of modern risk-based audit approach.