Research On The Auditing Risk Of Reverse Merger

Since its inception in 1990,the Shanghai stock exchange,securities market of our country grows vigorously,capital marketsgrow rapidly,and corporate demand for funds becomes greatly.To meet the needs of the survival and development,the enterprise constantly seek channels of access to funds,and listed financing gradually become an important way to get a lot of money for its superiority.Compared with the traditional way of relatively closed bank lending,listed financing not only has set up a platform for the money supply from the whole society for the further expand production,but also help enterprises to improve the awareness,to enhance the competitiveness,and to achieve the optimal allocation of resources.Because of the irreplaceable advantages and great convenience,more and more companies choose enter capital markets for funds.However,the reality is that the traditional way of IPO did not meet the large demand of enterprise listed financing.Influenced by various factors,many enterprises cannot meet the listed requirements,even after years of waiting could not be successfully listed.The backdoor listing arises at the historic moment when the contradiction between the enterprise financing demand and IPO strict rules becomes irreconcilable,and gradually become the mainstream of today's capital markets.Compared to the IPO,the backdoor listing threshold is low,easy to operate,and costs less time.Through assets restructuring,high quality assetsinjecting,the enterprise profitability improves,and eventually share price rises sharply.In addition,through the backdoor listing companies can directly into the public eye,with providing convenience for setting up the enterprise image.In addition to backdoor listing itself advantage,backdoor listing costs are also gradually reduced.At the same time,local governments are also actively promote corporate restructuring,encourage enterprises through the backdoor listings.Although the backdoor listings has obvious advantages compared to traditional IPO,and a large number of enterprises have been successfully listed by means of backdoor listing,but this does not mean that companies face risk reduction.On the contrary,compared with IPO companies,the backdoor listing companies often face greater risks,such as financial fraud and sustainable management risks.Especially the sustainable management risk is more outstanding.Backdoor listing the continued operation risk caused by the particularity of the enterprise itself makes the certified public accountants audit risk are different from traditional IPO audit risk.To safeguard the interests of investors,information demanders put forward higher requirements on the audit.