AHP-FCE Based Risk Assessment Of Audited Material Misstatement

With the rapid development of the market economy,CPA audit has become an indispensable part of modern economic development.The risk assessment of material misstatement as the key to modern risk-oriented auditing has become a key core part of the CPA audit.At the same time,the assessment of the risk of material misstatement also determines the key areas of the further audit process and the nature,time and scope of substantive procedures.As a result,the accuracy of the risk assessment of major misstatements has become increasingly demanding,and it has become increasingly important in auditing practice.At present,the scale of domestic domestic accounting firms is expanding step by step.However,many of the major misstatement risk assessment methods adopted by accounting firms have not kept pace with the development of modern risk-oriented auditing.In addition to the “big four” accounting firms in China,there are more or less problems with assessment attitudes,lack of importance points between assessment factors,evaluation procedures relying too much on individual subjective judgments,and obfuscation of assessment results.The assessment of the risk of material misstatement did not reach its proper guiding effect.In today's step-by-step development and expansion of the accounting firm,it is imperative to optimize the method of auditing the misstatement risk assessment of accounting firms to solve the above-mentioned problems.Based on the current status and existing problems of risk assessment of material misstatement,this paper proposes an assessment method using a combination of fuzzy comprehensive evaluation and analytic hierarchy process to assess the risk of major misstatements,from the industry environment,legal and regulatory environment,other external environments,and the nature of the company.The company has established a system of major misstatement risk assessments including 26 three-level indicators in eight areas including the selection and use of accounting policies,corporate goals,strategies and operational risks,and the measurement and evaluation of corporate financial performance and control risks.As an example,the audit project further validates the applicability of the assessment method,maximizes the role of the risk assessment of major misstatement in the auditing business of the accounting firm,and makes it more accurate in determining the key areas for further auditing procedures and substantive procedures.Nature,time,and scope,which will increase the efficiency and quality of the firm's audit work,and promote the prosperity and development of accounting firms.