Study On External Audit Risk Of Agricultural Listed Corporations

In recent years, financial fraud is repeated among agricultural listed corporations in our country, and the related CPA audit failure also comes one after another. To make up for the insufficiency of the traditional risk-oriented audit method in solving financial statements fraud that the management fraud led to in new situation, modern risk-oriented audit has been widely applied since2007in China. However, in the case of occurred audit failure in agricultural listed corporations in recent years, using the new audit approach did not fundamentally reverse the frequent agricultural listed corporations’ financial fraud situation. The root reason why the new audit method did not come into effect was likely that the CPA auditing in agricultural listed corporations did not closely combine this new audit method with the unique features of agricultural listed corporations in China, resulting the failure to prevent audit risk of agricultural listed corporations radically.About how to use particular risk features of agricultural listed corporations and from what areas to guard against the audit risk of agricultural listed corporations to minimize the possibility of audit failure, domestic and foreign external regulatory agencies do not have a uniform standard. Although there are a lot of research about the CPA’s expertise in audit at home and abroad and the thought that there is positive correlation between audit expertise and audit quality is generally believed, research on the agricultural sector are rare, especially the research which can combined with the special audit risk of agricultural enterprises in China. Therefore, in the current situation, in order to cope with the challenges of agricultural listed corporations’financial fraud brought to CPA, research in this area is particularly important. This paper was based on a large number of literatures and the latest authoritative relevant laws and regulations in recent years. At first, it elaborate the basic idea of the modern oriented-risk audit and the meaning of the audit risk, and analyze the general causes of audit risk in this context. Then it analyze the unique audit risk of our country’s agricultural listed corporations combined with the real basic situation of Chinese agricultural industry, and have a detailed analysis of basic characteristics of financial fraud method that a range of agricultural listed corporations adopt in the capital market of our country. Finally, it proposes some points from the view of CPA.The risk of material misstatement can be assessed using the analysis of SWOT and risk model’ application. CPA should focus on the prevention of financial fraud risk on those high risk projects, pay attention to the application of analytic procedures and realize the related parties. With the external information through the audit process and the judge from expertise, CPA can verify the strange details such as preventive measures against agricultural listed corporations specific audit risk. With the scenario analysis of agricultural company named "New Mainland", the paper find that these proposed measures to solve the relevant financial fraud bring about higher efficiency and effectiveness.