Research On Audit To Material Misstatement Risk Of E-commerce Company In IPO

The securities market is full of information asymmetry,and sufficient information disclosure is of high importance for the stability of the development of the securities market.The new "Securities Law" lists information disclosure as a separate chapter,which integrates the information disclosure system and highlights the importance of information disclosure.The new "Securities Law" has also increased the penalties for violations,which has consolidated the legal responsibilities of intermediaries.For companies planning to IPO,the IPO audit cycle is long,the content is complex,and the procedures are complicated.The IPO audit risk is more difficult to identify than the general audit.There are also many cases in China's capital market where fraudulent listings disrupt the market order and cause huge losses to investors.As the top priority in IPO audits,the assessment and response to major misstatement risks have received more attention and challenges,and certified public accountants have also assumed greater professional responsibilities.With the popularity and penetration of the Internet,the development of e-commerce is in full swing,especially for cosmetics,clothing,mothers and infants that are suitable for e-commerce models.At the same time,e-commerce companies and traditional companies have many differences in internal control and sales methods,such as dependence on information systems,Internet-based sales channels,small single transaction amounts and frequent transactions.The major misstatement risk of e-commerce companies shows certain industry characteristics,which poses challenges to the assessment and response of major misstatement risks.This article selects HD companies in the e-commerce industry as the representative First,the fuzzy comprehensive evaluation method is used to make a preliminary assessment of the risk of major misreporting of HD Company to determine the areas of high risk of major misreporting;then the model evaluation results are combined with the characteristics of the e-commerce industry,Further implement major misstatement risk assessment on the HD company's financial statement level and the identification level of major misstatement risk;finally,audit the HD company's areas with high level of major misstatement risk,and design the overall response measures based on practical experience and thinking And further audit procedures,proposed three methods to deal with the risk of major company HD reporting errors,namely the IT audit method,peer comparison method and industry-finance combination method.In assessing the risk of major misstatements,audit practice often involves only qualitative analysis.This paper establishes a fuzzy evaluation model to evaluate the risk of major misstatement of HD Company.Before the audit work is started,a mathematical model is used to evaluate the risk of major misstatement.The audit provides guidance and evidence.Regarding the risk of major misreporting,scholars 'research is generally based on auditing standards,proposing determination of overall response measures and further audit procedures,and few specific methods and principles can be applied.This article proposes a new audit response method for the major misstatement risk of IPO e-commerce.In particular,this article uses the IT audit method for the characteristics of the e-commerce industry.It also proposes to use the industry comparison method when dealing with major misstatement risk.The China Securities Regulatory Commission often requires companies intending to IPO to choose comparable companies for comparison in the application materials,but it is rarely used in IPO audits.Therefore,this article creatively introduces the peer comparison method into the audit risk response.At the theoretical level,this article can partially make up for the vacancy in response to the major misreporting risk of IPOs of e-commerce companies.The IT audit method,peer comparison method and industry-finance integration method are useful supplements to the major misreporting risk response.At the application level,this article provides a reference method for the IPO audit of other e-commerce companies,which can help certified public accountants to effectively assess and respond to major misstatement risks of e-commerce companies,improve audit quality,and reduce corporate financial fraud to a certain extent.Being identified leads to fraudulent listing behavior.