Research On IPO Audit Risk Management

With the continuous development of China economy and the growth of Initial Public Offering(IPO) company, IPO audit has become an important part of Certified Public Accountant(CPA) audit. Since IPO audit is complexity, systematicness and blurry boundary with consulting, at the same time, it faces an stricter supervision from the government, the risk of IPO audit is much bigger than the risk of traditional audit. Therefore, how to prevent and resolve the IPO audit risk and improve the quality of IPO audit has become a major problem that accounting firms and certified public accountants face.This paper states the audit risk and its theory used by the method of literature study, and case study After giving an overview of IPO business and the CPA’s responsibility in the process of IPO,this paper states the current situation of IPO audit and then analyses the subjective and objective causes of IPO audit By elaborating the example of WS company IPO audit, the causes of IPO audit risk are discussed from enterprise and CPA’s perspective. At last, the countermeasures are discussed.CPA in the IPO audit process on how to deal with the audit risk is summarized from the audit subject-- the accounting firm in the business to undertake the implementation process, perfect relevant supporting measures and audit object-- the specific business level, and summarize respectively. This study can not only help the accounting firm to avoid the legal risk, but also provide a reference for the IPO audit risk supervision.The main innovations of this paper include two aspects. Firstly, it analyses how to deal with IPO audit risks from CPA’s viewpoint and based on their experience to analyze. Secondly, a case study is used,which choice a typically dishonest IPO company, to discuss on how to control the special risks of the whole process.