Modern Risk-based Audit And Its Application

Since the1990s, the external business environment has undergone significant changes, and the business activities of enterprises have become greatly expanded, and business variety is increasingly rich, which undoubtedly have increased the difficulty of the auditing work. Entering the new century, with the exposure of financial fraud cases of a number of well-known enterprises in the world such as Enron, Lucent and Xerox, the public raises doubt about the professional competence of the auditors and the value of auditing work, and the auditing profession has undergone unprecedented pressure. In this context, the Big Four accounting firms have started to reflect on the traditional auditing approach and has proposed the development of a new auditing method. After ten years of practice and improvement, modern risk-oriented auditing approach has matured. By studying the academic results of the domestic and foreign experts and scholars, this paper is to provide some insights into this new approach and how to apply it in our country.This paper is divided into six parts:The first part is an introduction which elaborates the background of thesis, research methods and the domestic and foreign research status quo;The second part introduces the evolution of traditional audit approaches, including accounting number-based audit approach, system-based audit approach, as well as their advantages and disadvantages;The third part mainly explains the definition of modern risk-based audit approach, the background of the emergence of modern risk-based audit approach and the differences between modern risk-based audit approach and the traditional audit approaches; Through definition, we can have a macro understanding of modern risk-oriented audit approach and introducing its generating background reveals its historical inevitability; By comparative analysis, we can have a clear view of the advantage of modern risk-oriented audit approach;The fourth part mainly introduces the conceptual framework of modern risk-oriented audit, internal logic, and the auditing process; Firstly, this section gives a detailed explanation of some conception involved in modern risk-oriented audit approach such as auditing risk and the importance, because they constitute the theoretical basis of modern risk-oriented audit approach; And internal logic reveals logical thinking of modern risk-based audit approach; And auditing process provides a clear auditing thinking for auditors, and thus avoids the circumstances of wasting the auditing resources;The fifth part, which analyzes a series of restricting factors about the implementation of modern risk-oriented auditing in our country, points out that restricting factors mainly come from three aspects, namely, auditing standards, auditing environment and micro entity;The sixth part discusses the restricting factors discussed in the fifth part, and puts forward some reasonable suggestions on how to improve the three aspects of auditing.