Impact On Modern Risk-based Auditing Theory Of An Independent Audit Practice

At the beginning of the 21 Century, as the Enron Event and a series of world-shaking financial fraud affairs broke out, the certified public accountants met an unparalleled trust crisis. In order to find effect theory basis for the independence audit practice, the Modern Risk-Oriented Auditing was advanced. The Ministry of Finance People' s Republic of China issued the Chinese Certified Public Accountants Practice Standard based Modern Risk-Oriented Auditing( "the Theory" ) too , which is drawn out by the Chinese Institute of Certified Public Accountants at February 15, 2006. The Standard is convergent with International Standards on Auditing, Assurance Engagements, and Related Services issued by the International Auditing and Assurance Standards Board in 2003, and is effective dated on January 1,2007. Compared with the Traditional Risk-Based Auditing, the Theory has changed a great deal at auditing ideas, and the audit processing logic, and others , and induces some difficulties to the auditors to use it at the audit practices. For the sake of understanding correctly and using validly the Theory, the paper investigates the causes of auditing theory bringing and developing, and the relations between the Theory and other audit theories, and the Theory' s characters. The researching result indicates that Theory is more scientific and religious than Traditional Risk-Based Auditing and other audit theories, and confirmed by a auditing engagement at the paper. Good audit theory may lead audit risk because of obeying it in engagement improperly . In order to avoid that the Theory incomplete implement results in auditing defeat, the paper analyzes the actuality in China that CPA perform the Theory in engagements, and gives some suggestions about how the auditor use it effectually in audit practices.