The Reserach Of Inventory Audit Risk About Agricultural Listed Companies

On October 31, 2014, Zhangzi Island Group Co. Ltd. announced, because of the natural disaster, the company got nothing in millions acre of oceanic pasture which will soon catch in the autumn in 3 years ago, this led to a loss of 812 million. This announcement not only brought huge losses to investors, but also triggered a huge crisis of confidence in the A-share market, a direct impact on the capital market for the entire agricultural industry of the judgment and trust. Making a inventory of the classic fraud cases in China Stock Market, the financial fraud of agricultural listed companies is often the hardest hit. The weakness of agriculture make agricultural listed companies easily result in the motivation and demand of financial fraud. Due to the specificity of the mode of agricultural production,it provides convenient conditions for the fraud that other industries do not have.The special of biological assets has makes the stock become the main way for agricultural listed companies to manipulate the financial statements.With the financial fraud scandal breke out in the agricultural listed companies, people also pay their attention to the CPA, who undertaking the audit work. The audit risk is a significant error in the financial statements of the enterprise, and the possibility of inappropriate audit opinion is published after the CPA audit. Because the fact that the audit risk is closed linked with the audit failure and even the legal proceedings, in order to prevent the audit risk effectively on the basis of cost effectiveness, the modern audit method based on the principle of risk oriented has been widely used. However, the financial fraud of the agricultural listed companies is still frequent in the capital market, so some cautions accounting firms directly refuse to accept the audit business of farming, forestry, husbandry and fishery. But if we get to the bottom of the reason,we will find that the audit method itself is not invalid, but the CPA in auditing is lack of understanding of the agriculture, and the experience of audit when they implement the audit, so they can not identify some specific audit of agricultural enterprises. The other reason is the CPA did not combine the new audit method with the unique risk of the agricultural listed companies of China, especially there is no final identification and prevention of the audit risk of these companies, so the CPA failed from the audit risk control.Many scholars both at home and abroad have intensive research on the concept, connotation and control measures of the audit risk, and find that the audit risk arises from the listed companies, the CPA, the policy supervision department and so on. But specific to the inventory of this individual project, there is no one exploring the type of audit risk, the causes and preventive measures, especially the literature of the audit risk of the agricultural listed companies is scarce. Therefore, in the case of the inventory fraud of agricultural listed companies, to explore the production and prevention of the agricultural enterprises inventory audit risk is particularly important.The paper is based on a large number of domestic and foreign literature in recent years. Firstly, it expounds the basic idea of modern risk oriented audit and analysis the particularity of agricultural listed companies and the general causes of the audit risk in China. Secondly, take Zhangzi Island Group as an example, introduces the related audit risk of the company and inventory. According to the analysis, we found that the inventory and audit risk of company is derived from the business environment, the particularity of agricultural products, the deficiencies of internal control and inadequate supervision. What else,on the basis of risk analysis, the paper put forward to the corresponding preventive measures. Finally, in view of the overall situation of the agricultural listed company in China, we put forward to the suggestions including the standards of the establishment of agricultural listed companies, improve the disclosure of biological assets information, and enhance the professional of agriculture audit.