A Case Study Of The Company's Major Misstatement Risk Assessment And Response

Since China established the basic state policy of reform and opening up,the domestic market economy has developed vigorously.In recent decades,the process of globalization has also been deepening and the economic exchanges between countries have become increasingly close.In this wave of economic globalization,China's outstanding entrepreneurs are also constantly learning and drawing lessons from the business model of western developed countries.The enterprise grows gradually,the organization structure of the enterprise also rises subsequently complex.Opportunities and risks coexist.With the rapid development of China's market economy,a series of major financial fraud cases also occur.In the face of the increasingly complex market environment,China's audit methods have also changed.From the traditional audit model in the past,it has been transformed into a risk-oriented audit model with material misstatement assessment as the core.The modern risk-oriented audit model requires auditors to carry out a significant risk assessment of the auditees before the formal start of the audit,and then make an audit plan and implement the audit procedures according to the assessment results.In this way,audit resources can be utilized efficiently,and more audit focus can be placed on the places where there may be high risks,so as to improve audit quality.This paper analyzes the case of material misstatement risk assessment of LY company,and understands the assessment methods and countermeasures of material misstatement risk from the perspective of auditors.First of all,this paper introduces the background and research significance of the topic,and summarizes the domestic and foreign research results related to audit risk,so as to understand various theoretical studies on audit risk by domestic and foreign scholars and obtain a preliminary theoretical understanding of audit risk.And form the research framework of this paper as the following writing guidance.Secondly,it summarizes the previous research results and summarizes the theories related to the risk of material misstatement.The meaning,classification,characteristics,causes and countermeasures of material misstatement risk are introduced in turn.Then,the caseanalysis of LY company.Understand and analyze the industry background,main business and financial data of the company,analyze the limited data from the perspective of auditors,and find that the company may have material misstatement risks in six aspects,including the existence of monetary funds,capital occupation of related parties and income recognition.Subsequently,this paper gives Suggestions on countermeasures for the company's financial statement level and the material misstatement risk at the determination level.Finally,in the last part of this paper,the summary and Suggestions are made,and the outlook is made from two aspects of external factors and internal factors of the company.It is hoped that the study in this paper can provide a little reference for enterprises to reduce the risk of material misstatement.In this paper,the real gem listed companies case study and theoretical approach,in-depth understanding of the gem listed companies may have significant misstatement risk.Think about how to identify and evaluate material misstatement risks in the audit work,and then rationally allocate audit resources according to the possible material misstatement risks assessed,and make audit plans to achieve the purpose of reducing audit risks.