Research On Inventory Audit Risk Of Biological Assets Conducted By DC Accounting Firm

In recent years,with the continuous development of economy,the capital market is becoming more and more mature and prosperous,thus a large number of enterprises deciding to improve their financial position by using fraudulent methods to meet their growing demand.In retrospect of the representative fraudulent cases of securities market in China,it is not difficult to find that the agricultural enterprises are in majority,using inventory as a breakthrough.On the basic of these cases,the low gross profit rate of agricultural enterprises makes it easier to generate fraudulent demands;the diversity of production processes enables to have more convenient conditions;and the special nature of assets make reconciling the biological assets as the main way for agricultural enterprises to satisfy their fraud demand.In order to avoid the risk of financial statement from the agricultural enterprises,the public gradually transfer their attentions to the auditor's work.According to the further analysis,the measurement and valuation of biological assets,especially aquatic biological assets,are the most difficult aspects for the financial statement,also it is hard to detect and prevent fraud risks for audit work.Therefore,identifying and evaluating the relevant audit risks accurately becomes increasingly significant,which requires more professional judgments and higher capacity for auditors.Based on this situation,auditors should identify and evaluate the relevant audit risk properly so as to design and chose the proper audit procedures in response to the related audit risk.In October 2014,Zhangzidao Group Co.,Ltd.issued a statement,stating that the Group's 2011 seedlings,that is hundreds of acres of aquatic biological assets to be harvested in the fall of 2014,suffered heavy losses due to the impact on natural disasters such as marine disasters.In view of-the disasters,an impairment of these biological assets was recognized in 2014,which had a significant turnaround of loss approximately RMB800 million in 2014.1n accordance with the "Zhangzi Island",taking "aquatic biological assets" as the starting point,this article discusses the nature of audit risk and the responding methods.When identifying and evaluating these risks.We hope we can provide some experience and methods for auditors during their future biological assets audit projects.