A Research On The Audit Of Bond Issuance Of J City Investment Construction Company Of X Accounting Firm

Since the tax-sharing reform in 1994,the local government has experienced the intensified fund pressure and the fiscal revenue has not satisfied the financing needs for regional development.Thus,the local authorities have to cover this shortfall by the means of incurring debts in disguised form under controlled city investment companies.However,the cases of windowing dressing of financial statements and violating of debt financing is happening repeatedly in recent years.These city investment companies may outwit the regulators with cheats and lies temporarily,due to the incapability of paying back.Therefore,the significant approach to prevent the mentioned risk is the truthful and fair audit opinions given by accounting firms upon the financial statements of city investment companies.However,there is still developing room for the practical audit of bond issuance for the city investment companies in audit methods and audit procedures.This paper adopts the way of combining theories with case analysis and gives an introduction of X accounting firm and the current situation of J City Investment Company.Meanwhile,detailed analysis regarding each stage of audit is shown in this section.Then the author discusses the problems existing in the auditing stages and deep causes behind them.Recommendations for each stage in audit of X accounting firm are given to these questions.The utilization of risk assessment table could reduce the risk in the stage of undertaking the project.The quality of due diligence could be improved before signing the engagement letter.During the planning stage of audit,accounting firm should optimize staffing as well as the on-site auditing length and highlight the features of city investment company.The focus of the influencing factors of bond rate and improvements of the representativeness on the sample for walking-through testing could also refine the risk assessment.Audit methods regarding the land assets,engineer construction and development income should be majorize in the substantive procedures.In the audit reporting stage,accounting firm could also diversify the communication modes and cooperate with other specialists to enhance the efficiency.