The Research On Material Misstatement Risks Of Qing Lu Company Based On The Triangulation Of Audit Evidence Theory

In 2003,the International Auditing and Assurance Standards Board first proposed the concept of material misstatement risk in the new auditing standard ISA200,which further discussed the relationship between operating risk and material misstatement risk,required auditors to understand the audited company and its external environment as the basis for identifying and evaluating material misstatement risk.The new auditing standards define material misstatement risk as the possibility of material misstatement in financial statements before audit.When there is a material misstatement in the financial statements,the risk of an auditor giving an improper audit opinion is called "audit risk".In 2006,China first introduced the concept of "material misstatement risk" into the new audit standards,established the audit idea centering on identifying and evaluating material misstatement risk,and implemented the concept of modern risk-oriented audit mode.Under the new standards,auditors should design further audit procedures based on the identification and evaluation results of material misstatement risks to reasonably allocate audit resources and further improve audit quality.At present,most of the researches on the identification of material misstatement risk by certified public accountants in China build identification models through the abnormal changes of specific financial conditions or internal and external environmental indicators,and lack of exploration and research on the logical basis and theoretical framework behind the modern risk-oriented audit model.This paper adopts triangulation of audit evidence theory in identifying material misstatement risk,which was developed by Bell in KPMG global audit method concept elements in 2005.The triangulation of audit evidence theory requires auditors to comprehensively collect audit evidence from the three aspects of entity business states,management information intermedia and management business representation,so as to provide a systematic framework for identifying material misstatement risks of enterprises.However,most of the previous financial fraud case studies adopted the fraud triangle theory to identify material misstatement risk from the perspective of the motivation of management fraud,but few studies on the identification of material misstatement risk from the perspective of audit evidence collection.The triangulation of audit evidence theory demand certified public accountants to collect information from the whole process of generation,processing and presentation to identify risk of material misstatement.The theory demand auditors to design and implement the specific audit procedures according to the overall level assessment,strategic goals and business risk analysis and risk of material misstatement results.This theory provide a theoretical basis and research framework for the modern risk-oriented audit mode comprehensively collecting audit evidence.This paper choose Qing Lu company as an example.This company's main business changed several times in a short span of a few years,and experience several through material assets reorganization.After successive years of poor performance of profitability,delisting warning was given,but then it made up for the loss to return to profit through large government subsidies and debt forgiveness.The company has poor management of strategic objectives and significant operational risks.This paper elaborates on how to apply the evidence triangle theory to the audit work of Qing Lu company,and comprehensively collect audit evidence from three aspects according to the theoretical framework to identify the material misstatement risk of Qing Lu company.Finally,this paper represents suggestions and safeguard measures for the application of this theory in auditing practice from the aspects of implementing the modern risk-oriented auditing concept,improving the CPA knowledge system and strengthening the computerized auditing under informatization,so as to make this paper of practical significance for the research on the triangulation of audit evidence theory.