Research On Prevention Of Merger And Acquisition Audit Risk

In recent years,economy in my country is developing rapidly,capital market functions and systems continue to improve,enterprise mergers and acquisitions become one way of the high efficiency and low cost to expand the scale.But because of information asymmetry and other reasons makes the M & A activities often give up halfway,in order to promote M&A activity,enterprises begin to seek help from the accounting firm and other intermediaries to fully identify risks in the process of M&A.The merged company hope that through the employment of accounting firms,enterprises can know more information on the risk of M & A activities and timely control and prevent,after the acquisition can make an accurate and comprehensive assessment.Audit of M&A is different from general audit of financial statements.Compared with the general financial statements auditing,M&A audit needs to perform more audit procedures,audit process is relatively complex and has higher risk,therefore accounting firms need to be careful when undertaking the auditing items of M&A,need more configuration knowledge of mergers and acquisitions in the process of audit professionals involved in order to reducing audit risk within a certain range after undertaking the auditing items.Based on L Accounting Firm as a case,I expound the forms of audit risk that auditors need to face in the specific M&A audit projects,Including the risks posed by the external environment in which both parties are merged,the risks associated with both parties,the risks posed by the valuation of the target firm,the risks associated with the choice of the M&A approach,the risks associated with the recognition of the goodwill,the lack of independence caused by the unilateral hiring of firms,the lack of expertise or practical experience of auditors,and the inherent limitations of auditing;And then I analyze the L Accounting Firm in the M & A audit project is how to prevent,including its acquisition auditrisk of the general preventive measures and specific preventive measures.Then I put forward the shortcomings of L Accounting Firm in the M & A audit risk prevention,including the adequacy of the audibility of the M & A audit project,the failure of the quality control review,the auditor lacks the expertise and practical experience of M & A,the firm did not set up a special M & A audit team,and the firm's risk management strategy tool is single.And finally I put forward the firm should strengthen the risk of M&A in the future,so as to seize the share of the audit market while the risk of their own is controlled within a certain range,including the improvement of the internal control system related to the M & A audit of the firm,comprehensively improve the professional competence of the auditors and improve the risk tolerance of the firm.Compared with the time of the foreign M&A activities between enterprises,our country enterprise mergers and acquisitions activity time is not long,but in the future M&A will be more and more frequent,so accounting firms will have more opportunities to perform the M&A audit in the future,and the M&A audit will bring more income for accounting firms.At present our country audit risk prevention and control research for M&A is not perfect enough,many of the concepts and problems in the prevention and control about mergers and acquisitions audit also need to be further studied and discussed.Therefore,I hope that this article's analysis can be helpful to the control of the risk that accounting firms face when it perform M&A audit,reduce the audit failure,and set up their own brand.