Research On Auditing Risk Of ST Companies Under The Background Of The Delisting Mechanisms Reform

All along,Company listing in China is costly and difficult,and net profit has been the single effective delisting indicator of the delisting mechanisms for a long time,which has led to Chinese ST companies being the focus of investor speculation in the capital market even though their failure in performance.ST companies can easily maintain the identity of a listed company through a series of measures,which ultimately leads to a deformed market that ST companies are treated as a scarce resource in the capital market.From 2012 to 2014,in order to change this situation,the CSRC,together with the Shanghai and Shenzhen Stock Exchanges,began to make drastic reforms to the delisting system.The reforms started from the delisting indicators and supervision,and formed a diversified delisting standard system which contained financial,regulatory,transaction,and continuous existence indicators.The four types of indicators is being strictly implemented.The effect of related policies after the reform is gradually emerging.In recent years,the fraud cases like Xintai Electric and Boyuan Investment company have frequently occurred,causing doubts about the audit quality from the capital market.This paper adopts a combination of theoretical analysis and multi-case analysis.In the context of the reform of the delisting system,the paper chooses ST companies,the high-audit risk group,as the research objects.Under the guidance of motivation theory,five case companies are selected to be analyzed.From the two aspects of the internal demand and external stimulus,the paper would identify ST company's main motivations which is important guidance for recognizing the means and cheap thicks ST companies uses to avoid delisting.Through comprehensive and detailed analysis of the ST companies' means of avoiding delisting,the paper expects discovering the audit risk and related key audit areas of ST companies,and then classifies a risk matrix by evaluating the probability and magnitude of different audit risks.According to the matrix.the paper would provide auditors with measures to control or reduce auditing risks.Thus,the paper has certain theoretical and practical significance.This paper innovatively adopts multi-case study method to identify,summarize,and generalize the means ST companies uses frequently for avoiding delisting.According to what are identified above,the paper would obtain key audit fields and methods for controlling audit risk of ST companies at all levels,which provides an effective way for the auditor to cope with ST companies audit and provides high quality audit service.