Multi-case Study On Causes Of The Audit Risk Of The NEEQ-listed Companies

As an emerging and characteristic over-the-counter market in China,the National Equities Exchange and Quotations(NEEQ)could efficiently relieve the financing problems of the small and medium-sized enterprises of innovation and entrepreneurship.However,the types and situations of illegal activities are also increasing with the expansion of its market scale,bringing more audit risk of the NEEQ-listed companies comprehensively.In addition,at present,most of the research related to the NEEQ-listed companies stays in the research on how to carry out the audit.There are not enough researches on audit risks and causes,and descriptive analysis was often used.There is no targeted case study,but the audit risk is still the focus of the audit theory,the analysis of the causes of audit risk of the NEEQ-listed companies is helpful to solve the problems of audit risk control,which is of great significance in practice.Therefore,this paper focuses on the multi-case study method and conducts research on the causes of audit risks in the listed companies on the NEEQ.In this article,based on the audit system theory and modern risk-oriented audit theory,combining the related research on audit risk and causes,a cause analysis framework of audit risk of the NEEQ-listed companies has been innovatively constructed through analyzing the characteristics of the NEEQ,the NEEQ-listed companies and the audit risk.The writer picks up 13 audit cases of NEEQ-listed companies from the 7 supervised accounting firms since NEEQ issued regulatory measures in April 2016,finding out the problems and causes related to audit risk in three dimensions:external environment of audit,audit subject and audit object,and then proposes measures about how to control and prevent the audit risk of the NEEQ-listed companies.It's found in this study:(1)From the perspective of the external environment of audit,at present,it is the competitive market,the imperfect laws and regulations,unformulated relevant rules and the inadequate supervision and punishment by the supervision departments that affect the risk of material misstatement and inspection risk and sequentially increase the audit risk of the NEEQ-listed companies;(2)From the perspective of the audit subject,because the CPAs lack professional competence and didn't perform the audit responsibly and conscientiously,and at the meanwhile the supply and demand of audit resources become unbalanced,some accounting firms with deficient professional competence which blindly expanded and haven't paid enough attention to the particularity of the NEEQ create more the audit risks to the NEEQ-listed companies.(3)From the perspective of the audit object,some of the NEEQ-listed companies objectively have a series of problems such as the risk of sustainable management,the influence of ultimate controlling owner,the incomplete corporate governance structure,the deliberate concealment of important issues,the low professional qualifications of personnel and the weak financial footing,which increased the risk of material misstatement in the audit of the NEEQ-listed companies.The innovation of this article lies in:(1)Based on the audit system theory and modern risk-oriented audit theory,this article constructs a cause analysis framework of audit risk of the NEEQ-listed companies;(2)This article fully uses the multi-case study and the newest cases from the 7 supervised accounting firms which are typical and all of the supervised cases happened after the issuance of regulatory measures up to Dec.31,2017;(3)This article makes a ranking importance weight of the audit risks of the NEEQ-listed companies that have been classified and proposes measures about how to control and prevent the audit risk of the NEEQ-listed companies more reliably and practically.Such a multi-case study enriches the related research on audit risk of the NEEQ-listed companies and also provides supplement and perfection of practical experience for theoretical research.In addition,this article puts forward the countermeasures for the CPAs to audit the NEEQ-listed companies and summing up experience,improve the auditing level of the NEEQ-listed companies,reduce related risks,and elevate the quality of the NEEQ-listed companies.