A Study On The Audit Risk Under Valuation Adjustment Mechanism

VAM?Valuation Adjustment Mechanism?is a compensation clause existing in the Reform of Non-tradable Shares,New stock Offering,Assets purchase and Material Assets Reorganization,in order to stabilize stock prices,to shore up the confidence of investors,and protect medium and small investors.The realistic functions of VAM are obvious that VAM can enhance the prudence,rationality and efficiency of the transaction.Meanwhile,VAM boosts additional pressure on the promisor to realize the committed profit.Therefore,fraud motivation of the company which has promised VAM is higher than the others,imposing more risks to the auditors.In the year of 2018,a lot of listed companies will fulfill their promise of VAM.During that time,auditors will be confronted with risks and challenges.This phenomenon thus must be brought to the forefront by accounting firms and auditors.When the day of Aug.16^th.2017,CSRC?China Securities Regulatory Commission?punished,confiscated and fined the accounting firm named Zhongxinghua and auditors of Boyuan Investment,the first delisted company based in Zhuhai City.In this case,Boyuan Investment cooked its book for concealing its unfulfilled VAM,which is a representative case deserving a deeper exploration.The thesis is based on the case of Boyuan Investment,combined with the regulations and polices abreast of the times,expounding the auditing risks under the VAM clauses.The thesis raises the risk factors of VAM,analyses the case of Buyuan investment and proposes a global solution to the risks.The innovation of the thesis is that it combines the conception of auditing risks and VAM,exploring a new area of auditing risk studying.VAM is a hot Regulatory focus,so the thesis will be helpful and meaningful to the research and practice of this area.