The Research On Risk Assessment Of Material Misstatement Of Reanda Certified Public Accountants

From the bursting of the Yin Guangsha bubble to the delisting of Xintai Electric,from the crash of Enron to the financial scandal of Toshiba,not only the majority of investors have been seriously hurted,but accounting firms and auditors have also paid a heavy price.The above accounting fraud events could not be discovered beforehand,because the auditors did not consider identifying the risks of the auditees in the initial stage of the audit,and did not pay due attention to the problems found in the audit process and the risk that may be exposed.Certified public accountants could not check the company's vital risk areas,thereby increasing the audit risk and eventually leading to the failure of the audit.Traditional system-based auditing or account-basis auditing have failed to reduce the auditors' auditing risk.Nowadays,the complex audit environment has put new requirements on auditors.The audit industry urgently needs a new audit model to solve these problems.In order to meet the needs of the public and protect the position of certified public accountants in the market,the CPA Association has revised the audit model.The new accounting standards requires auditors to focus on risk assessment of material misstatement,and the concept of risk-oriented auditing is gradually introduced in China.Risk-oriented auditing requires auditors to use risk assessment procedures as a starting point,from the time the business undertakes to issue audit opinions,it is still necessary to pay attention to the company's risks and to implement audit procedures in a targeted manner.Especially in the early stages of auditing,risk assessment is particularly important.The effectiveness of the risk assessment process determines the overall efficiency of the audit.In the actual audit process,most of the accounting firms have included risk assessment procedures in the audit draft and require the implementation of risk assessment procedures for important customers such as listed companies and large groups.However,many problems have also been exposed in the process of risk assessment,which is mainly reflected in the fact that the thinking of risk assessment has not yet been changed,the information data system required for risk assessment is still not complete,and the method of risk assessment is relatively backward.Failure of risk assessment procedures can easily lead to audit failure,and the significance of risk-oriented auditing does not exist.Whether it is from the perspective of improving auditing efficiency of auditors or restoring public confidence,Certified Public Accountants should improve our own risk assessment ability.Therefore,thispaper hopes to explain the problems of risk assessment in the audit case,analyze the causes of the problems and make corresponding recommendations.This article takes the auditing unit Reanda Certified Public Accountants and Jiuhao Group.The object of the case is the risk assessment of material misstatement.As a domestic large-scale firm,Reanda Certified Public Accountants still has many problems in the risk assessment of the Jiuhao Group,which eventually led to the failure of the audit and was punished by the China Securities Regulatory Commission.In this paper,by understanding the process of risk assessment of the Jiuhao Group by Reanda Certified Public Accountants,from the perspective of risk assessment of material misstatement,a comprehensive,systematic and objective description of the problems in the risk assessment of Reanda Certified Public Accountants and analyzing the reasons behind the problems,and combining with the case to propose countermeasures and suggestions for improving the efficiency and effectiveness of the accounting firm's risk assessment.From the perspective of the concept,we propoae to promote the advancement of risk assessment procedures,provide a quality control system for risk assessment,and increase the overall understanding of risk auditing from auditors.From the perspective of basic conditions,we propose to set up an information data system,raise the level of audit practice,and develop auxiliary auditing tools.From the perspective of clarifying the information analysis thoughts of risk assessment,we propose to use strategic analysis techniques as the basis,business risk assessment as the orientation,and analysis and review procedures as the center.This paper has five parts.The first part of this article is an introduction.Briefly describe the achievements and deficiencies in the relevant research institutes for risk assessment of material misstatements.Focusing on the deficiency of risk assessment research,this paper proposes the focus and significance of this study,and briefly summarizes the research methods adopted in this paper and the framework of the full text.The second part is a summary of risk assessment theory for major misstatement.This section describes the composition and characteristics of the risk of material misstatement,and describes the possible risk factors around the relevant definitions.The concept of risk assessment induced by auditing the risk of major misreporting shows the role played by the risk assessment in the entire audit process,and focuses on the process and method of risk assessment.The third part is the case of risk assessment of material misstatement.Introduction.A brief introduction was made to the auditing firm Reanda Certified Public Accountants,describing how Reanda implemented a riskassessment procedure for major misstatement of the audited company Jiuhao Group and explained that Reanda learned from the Jiuhao Group in this risk assessment.The fourth part is the analysis of the problems and causes in the risk assessment of major misstatement by Reanda Certified Public Accountants.Through the case,it points out the problems in the risk assessment of major misstatements,which are mainly reflected in the ideological insufficiency of risk assessment,the absence of a basis for risk assessment on the conditions,and the analysis of risk assessment in the thinking.Combined with relevant issues from the perspective of audit risk awareness,risk assessment basis,and risk analysis capabilities point out the causes of the risk assessment point by point.The fifth part is the countermeasures to prevent problems in risk assessment of material misstatement.Comprehensive theoretical basis and case analysis,proposed the scheme that how to improve the implementation effect of risk assessment.To promote risk-oriented audit from the perspective of changing the traditional audit thinking,build the basis for risk assessment from the perspective of building information databases and improving the ability of auditors,clear ideas for risk assessment information analysis from the perspective of strategic and business analysis.