Research On Inventory Audit Of Zhangzi Island Company

In recent years,the country gradually pays attention to agriculture,rural areas and people’s livelihood,thus paying more and more attention to the development of agricultural listed companies.With the strong support of the state to the agricultural industry,agricultural enterprises become more and more profitable,and the number of listed companies is increasing.In order to increase the number of shares and attract investors,many listed companies have more and more financial frauds,and their means are endless.As we all know,inventory,as one of the main items of current assets in assets and liabilities,is also one of the projects with the largest proportion of enterprise assets in cloud operating capital,with strong liquidity and a great variety of items.And the choice of inventory pricing method in accounting standards is also very independent,so inventory has become an important tool for domestic and foreign enterprises to make financial fraud.Since the inventory items of agricultural enterprises are mostly biological assets,the particularity of biological assets determines the complexity of inventory auditing of agricultural enterprises,which makes it difficult for for CPAs to audit them and raises the audit risk of CPAs in performing audit business.In this paper,the typical case of scallop escape on Zhangzi Island is selected as the research object.In 2014,800 million yuan scallop flying from Zhangzi Island Company caused widespread concern from all walks of life.The special audit of the company’s inventory impairment has also become the focus of discussion.Although regulators have finally recognized the fact that the company is suffering from cold water,The concern "where is the scallop" still continues.However,after more than two years,the history repeats itself,and the "scallop escape" event has been upgraded to version 2.0,resulting in a loss of more than 600 million yuan for Zhangzi Island.This not only makes the outside world have strong doubts about Zhangzi Island,but also makes the public focus on the risk of inventory audit.On the basis of the existing research results and through the case study of Zhangzi Island Company,this paper analyzes the risks in inventory audit of Zhangzi Island from two aspects of material misstatement risk and detection risk through literature analysis and case analysis.Zhangzi Island has abundant biological assets and is greatly affected by environmental factors,which makes it difficult to supervise its inventory.In addition,the Company has poor internal control and the CPAs lack relevant fishery expertise.These factors jointly lead to the increase of inventory audit risks.After analyzing the causes of inventory risk,this paper studies the problems existing in the inventory audit of CPAs.The problems such as auditors’ lack of relevant agricultural knowledge,insufficient identification of audit risk,absence of effective internal inventory control test,failure to obtain sufficient audit evidence for inventory taking supervision,and insufficient audit independence are worthy of attention.From the perspective of CPA,this paper then puts forward some referable measures corresponding to the problems to reduce the risk of inventory audit of Zhangzi Island.In the end,this paper summarizes the full text,and finds that the audit risks and existing problems in inventory audit of Zhangzi Island are universal among listed agricultural companies.Despite certain differences in the nature of inventories of various agricultural enterprises,most of them have some commonalities as biological assets.Therefore,based on the case analysis and study,this paper proposes some suggestions to prevent the inventory audit risk of agricultural listed companies,including: enhancing the professional competence and audit independence of CPAs;improving the audit risk response procedures;employing experts to assist in work;and strengthening the supervision of accounting firms.It is hoped that such suggestions will be helpful for CPAs to audit the inventory of agricultural listed companies.