Evaluation Studies On Ipo Auditing Risks

Under the background of risk-oriented audit,evaluation of auditing risk of the audited entity made by accounting firms,as third-party audit institutions,is the necessary preparation before it takes over the project.In the process of evaluating audit risks,scientific and accurate selection of evaluation methods will have a huge effect on the evaluation results of audit risks.To reduce the audit risk to an acceptable extent,accounting firm formulates the audit plan.In the implementation of the audit process,evidence collected by adults should be adequate,appropriate and effective.As the second largest capital market independent of the main board market,the GEM has established higher requirements for the IPO audit because of its inherent uniqueness.Therefore,as an auditor,to effectively control the audit risk in the IPO process of GEM,the crucial judgments fall on the evaluation of IPO audit risks and selection of the evaluation methods.However,because it is limited by professional judgment,failure of judgments may occur by a professional person in the face of uncertainties,in the spite of the basis of their work experience and professional judgment.Therefore,in order to improve the veracity of judgment,it is necessary to use qualitative and quantitative methods to reduce the IPO audit risk.Comprehensive evaluation method and the audit risk model can be used to quantify the audit risks to make the evaluation result more accurate and objective.This not only has a significant breakthrough in the audit risks model proposed by auditing standards,but enhances the operability in practical work with the theory of ambiguous comprehensive evaluation.This paper plans to use a combination of qualitative and quantitative research methods to evaluate the audit risks more accurately and objectively,improve the audit quality and reduce the audit failure.First of all,this article introduces features of listed companie on GEM,and compares the IPO audit risk points of listed companies on GEM with the IPO audit risk points of main board listed companies.Then,combining with the characteristics of GEM,the IPO audit riskevaluation system of GEM has been established(using the literature method and interview method,combining with the audit risk model,collecting the risk points that scholars and the project managers regard as affecting the audit risks,and then through the questionnaire selecting the main risk points of IPO audit risk of listed companies on GEM,eliminating the audit risk points with small correlation in practical work,and finally screening 11 major risk points to set up IPO audit risk index system of listed companies on GEM).Secondly,experts scoring methods are used to compare the importance of the same level of indicators.Analytic hierarchy is found to conduct weight design of indicators at the same level.Ambiguous and comprehensive evaluation quantifies audit risks.Finally,IPO audit risk evaluation system of listed companies on GEM is put into use.Assessment of audit risks is completed by ambiguous and comprehensive evaluation method.And quantitative results are obtained.The comparison between the evaluation results obtained by using audit risks model and audit reports given by accounting firms to the case companies proves that the model is highly feasible and effective.It lays a foundation for quantitative audit risk evaluation in the future.