| Since 2014,the merge and reorganization of Chinese capital market grows gradually.The increasing transaction of merge and reorganization for listed companies are opportunities and challenges for CPA firms with certificates of securities.The economic factors relevant to significant asset reorganization is fairly complicated and high premium and high performance promise frequently occurs,which increase pressure and motivation upon acquiree to fraud and special risk of inflated profit,and hence relative high audit risk.So the factors of merge and reorganization requires CPAs with relative high professional capability and independence,and they also need to acquire relative high professional prudence and professional judgment when such high risk area exists,therefore in terms of listed company with significant asset reorganization,the CPA firms shall pay highly attention towards audit of their financial statements.This article is based on a case of listed company x,who purchased 100%shares of company Y via issuing shares and paying cash in March 2016.Audit of this M&As in March 2016 was executed by accounting firm J,and then accounting firm T was responsible for the 2016 annual audit.Project group of T identified,assessed and coped with the material misstatement risk undergoing the material assets restructuring by means of the risk-oriented audit approach while applying the fraud triangle theory,combined with financial statement analysis.In general,acquiree has problems such as internal control deficiencies,goodwill impairment,company performance frauds,and asset fraud.Simultaneously,designed and implemented further audit procedures as to reducing the audit risk to an acceptable level.This paper selects and concludes the common audit risks referred above,so that providing a reference for accounting firms. |
