Research On The Audit Risk Of Goodwill Impairment Under The High Premium Of M&A And Its Countermeasures

Recently,the frequently occurred expanding actions by merger and acquisition in Chinese capital market has resulted in expanding book amount goodwill of listed companies,and the problem of goodwill impairment emerges.The large-scale impairment of goodwill affects the performance of the company,seriously affects the operating profit of the enterprise,and even causes the operating profit of the enterprise to be negative.From the perspective of the motivation of goodwill impairment,in practice many enterprises opportunistically use the standard loopholes of goodwill impairment to conduct earnings management operations,so that stakeholders have doubts about the financial information they produce.Therefore,it is necessary to discuss the impairment of goodwill.As an independent social audit institution,the assurance business provided by the accounting firm plays a supervisory role.The inherent risks of goodwill impairment,such as difficult valuation,high flexibility and inconvenient market-oriented transactions,will make certified public accountants face higher audit risks.Therefore,one of the difficulties that the current accounting firms and auditors need to consider is how to reduce the audit risk in the field of goodwill impairment and ensure the quality of audit work.Based on the research background of 261 audit clients of listed companies of TJ accounting firm,this paper analyzes the overall situation of goodwill stock and goodwill impairment from 2014 to the third quarter of 2019.Considering the representativeness of the industry,the scale of goodwill and the impairment,we choose YINYI CO LTD.as the main case in this paper.By combining the theoretical framework of the identification and evaluation of the major misstatement risk,and using the idea of "risk elements—risk events—risk results",the paper analyzes the identification and evaluation of significant misstatement in the process of goodwill impairment of YINYI CO LTD.stock from the four perspectives of external environment risk,industry operation risk,internal control risk and financial risk,and closely links the risk with the business environment and the overall situation of the enterprise.Finally,by summarizing the cases and practice,the paper sums up the difficultiesin the special audit of CPA's goodwill impairment from three aspects of inherent risk,control risk and inspection risk,including the special nature of goodwill,loose standard system,large elasticity of audit conclusion,unreasonable internal control and ownership structure,and the dependence of CPA on the third-party work results.In the end,this paper puts forward some suggestions from two aspects: the refinement of standards and the improvement of auditors' professional ability.