The Application Of Modern Risk-oriented Audit In Small And Medium Accounting Firms

The rapid development of the global economy has also brought about higher risks while accelerating the liquidity of funds.Since the rise of corporate business risk factors in the 21 st century,accounting firms have become increasingly difficult to audit.The sensational Enron incident,the Parmalat incident,and the Green Land incident had sounded alarm bells for the accounting firm.In order to reduce the risk of audit failure,a new risk-oriented audit model has begun to emerge and develop.Starting from January 1,2007,China's relevant laws and regulations required that modern audits should use modern risk-oriented auditing model.The small and medium accounting firms with different bases still generally lack relevant theoretical and practical foundations.However,small and medium accounting firms in China account for a relatively large proportion of the total number of firms in China,mainly for a large number of non-large enterprises to provide services.Therefore,in order to promote the balanced development of China's auditing business,it is necessary to explore and promote the use of modern risk-oriented auditing in small and medium accounting firms.Under the background of this era and the significance of research,this paper combines the methods of literature induction,quantitative analysis,and case analysis to analyze the application of modern risk-oriented auditing in small and medium accounting firms.First,the article summarizes the domestic and foreign literature review,and explains the connotation of the modern risk-oriented auditing model.It also compares it with the traditional risk-oriented auditing model in many aspects and makes adequate preparations for further research;Secondly,this article analyzes the current situation of China's small and medium accounting firms and analyzes the feasibility and necessity of applying the new audit model to make readers understand that modern risk-oriented auditing techniques are reasonable and scientific in small and medium accounting firms,it is the correct choice under the background of the times;Furthermore,the specific process of using modern risk-based auditing was highlighted in the theoretical research aspect from three points(preliminary risk assessment-take the audit plan-issue audit report).Combining with the flow chart and associated with the X auditing firm's auditing case for Company A,the entire process of the use of modern risk-oriented auditing model by the accounting firm was conducted.A more detailed description allows the reader to have an in-depth understanding of the risk-oriented audit process;Then,based on the above cases,the advantages and problems demonstrated by the small and medium-sized accounting firm adopting this method for auditing are listed and analyzed one by one.Finally,based on the issues identified,this paper summarized the measures and suggestions for better promoting the application of modern risk-oriented auditing models in small and medium accounting firms from the three aspects of CPA association,CPA,and accounting firm.