The Research On The Inventory Audit Risk And Prevention Of Agricultural Non-staple Food Processing Enterprises In The Case Of Zhenlong Specialty Company

Inventory is a very important asset for most companies.It flows through various operations and has a wide range of impacts on companies.Due to the variety of inventory,strong liquidity,and a wide range of alternative accounting policies,it is easy to become a“water reservoir” for corporate profits.From the audit failure cases of Lam Tin Co.,Ltd.,Yinguangxia Co.,Ltd.,and Hongguang Industrial Co.,Ltd.to Wan Fusheng Branch and Shen Xianyuan in recent years,these companies all used the inventory items to conduct financial frauds.And it can be found that manufacturing and agricultural enterprises occupy a large proportion,agricultural and non-staple food processing companies as a sub-sector of the manufacturing industry and its upstream industry is agriculture,forestry,animal husbandry and fishery.Therefore,it poses the overall characteristics of the manufacturing and agricultural enterprises,which requires the auditors to effectively identify,evaluate,and respond to the audit risk of inventory items during the audit process to improve the quality and efficiency of audit work.However,in actual work,because the auditor did not fully assess the risk of material misstatement of the inventory item during the audit of the inventory project and the inspection risk existing in practice audit process.As a result,the inventory item was misstatement and the auditor found this case.For these reasons,when auditing the inventory items of agricultural and non-staple food processing companies,how the certified public accountants effectively respond to the risks of inventory audits and improve the audit quality is worth for us deeply ponder.This article takes risk-based auditing as the cornerstone,conducts case analysis on the basis of normative research,and analyzes Liaoning Zhenlong specialty products in the agricultural and subsidiary food processing industry.This article analyzes the major misstatement risks and inspection risks of Ruihua Certified Public Accountants' auditing inventory items in the auditing of Zhenlong Specialties' inventory project,and finds that the major misreport risks of its inventory items are mainly reflected in the existence of identification and pricing and apportionment,and lack of inventory-related internal controls.The inspection risks mainly include continuous auditing by the firm,which results in impaired independence,unreasonable audit plan setting,insufficient risk assessment procedures,inadequate inventory pumping ratio,and lack of corresponding analytical procedures in theaudit process.Finally,some suggestions were put forward for the risk response of the inventory audit of the agricultural and non-staple food processing enterprises.To deal with the risk of major misreporting,on the one hand,the main business of the audited entity,the relevant inventory circulation links and the production process should be thoroughly understood.On the one hand,it is necessary to see whether the inventory-related internal control design is reasonable and whether it is effectively operated.As to the prevention of inspection risks,first of all,the auditor maintains independence and professional cautiousness and maintains risk awareness in the process of performing corresponding auditing procedures;secondly,according to the characteristics of different enterprises' inventory,the individualized monitoring disc procedures are designed and strictly implemented;what is more,the auditors conducted independent inventory valuation tests again,focusing on the use of analytical procedures in the inventory audit process.Finally,It is necessary to cultivate professional expertise of the auditors,and when necessary relevant experts are required to assist in the work.