Research On The Risk Assessment Of Major Misstatement Of H IPO Audit Project

Modern risk-oriented audit focuses on the identification and evaluation of material misstatement risk,emphasizes the systematic and strategic view of enterprise risk analysis,and designs and implements further audit procedures for the risk identification and evaluation of major misstatement.IPO audit has the characteristics of long cycle,heavy workload and high risk.The idea of risk-oriented audit is helpful for auditors to determine the focus and scope of audit,concentrate limited audit resources in high-risk areas,reasonably allocate audit resources,and improve audit efficiency and effect.The allocation of audit resources,the design of procedures and the specific implementation are all determined by the assessment results of material misstatement risk,so it is very important to accurately assess the level of material misstatement risk.The research object of this paper is M accounting firm's risk assessment process of material misstatement risk of H company's IPO audit project.This paper expounds the current situation of M accounting firm's risk assessment of this project,analyzes the existing problems,and points out that the content of risk assessment lacks depth,the design of risk assessment procedure is too simple and perfunctory,and the results of risk assessment can not guide the risk response well.Then the necessity and thinking of improving the risk assessment of material misstatement are put forward.In this paper,identifies the risk of material misstatement at the financial statement level and assertion level of company by means of questionnaire,interview,consulting the company's relevant information and analyzing the financial data and non-financial data.Using PEST analysis and Porter's five forces analysis to identify the external risk of H company,from the perspective of company nature,the choice and application of accounting policies,fraud triangle model to identify the internal risk of H company,using COSO internal control framework to analyze the internal control of H company,in order to identify the design and implementation risk of internal control.Then the identified risk factors are divided into financial statement level and identification level of major misstatement risk,as the basis of evaluation index design.After that,AHP fuzzy comprehensive evaluation method is introduced to evaluate the risk of major misstatement of H company.The sub items of indicators are given weight according to the requirements of risk assessment,the scores of sub items of lower level are summarized,the scores of higher levelitems are obtained,and so on,and the scores of three level indicator items are obtained.Finally,according to the score,the index risk is determined from large to small,Therefore,the risk assessment level of H company's material misstatement is high.According to the scores of each factor,the risk level is divided,and the report items with high risk level of major misstatement are obtained: inventory,accounts receivable,operating revenue,operating cost,and then further audit procedures are designed.In order to reduce the audit risk of H company's IPO to an acceptable level,we designed a plan for M accounting firm to deal with the risk of material misstatement.