The Study On The Audit Risk Of The GEM Listed Company

Shenzhen Stock Exchange launched GEM in 2009,aiming to provide development space and more effective ways to raise funds for high-tech enterprises,especially start-ups and small and medium-sized enterprises.By the beginning of 2020,over 800 companies have been listed on GEM.The GEM market not only promotes the development of high-tech industries,accelerates technological innovation,and adjusts the industrial structure,but also improves the investment and financing system,guarantees the flow of capital elements,and promotes the allocation of social resources,thereby promoting the development of the national economy.The market positioning of GEM enterprises is high-tech enterprises.Most of these enterprises are emerging small and medium-sized enterprises.Generally,the shareholding structure of them is highly concentrated,internal controls are not sound.At the same time the ability to resist risks is poor,and the quality of assets is not high.This increases the difficulty and complexity of auditing.On the other hand,since the profitability of GEM companies is poor,and the threshold for listing is lower than that of the main board,many companies may not hesitate to whitewash the statements to meet the GEM listing conditions,so the management has a strong motivation for financial statements fraud.These factors have increased the audit risk of GEM listed companies to a certain extent.Financial fraud in the GEM market has been more and more common in recent years,not only causing investors' interests to be damaged,but CPAs and accounting firms will also fall into a serious crisis of trust.Therefore,studying the audit risks of GEM companies is conducive for CPAs to conduct more efficient and accurate audits of GEM listed companies,and has a certain effect on the healthy and stable development of the GEM market.The research question in this article is what the risks of CPAs when auditing GEM enterprises are,what the aspects of the risk of material misstatement and the risk of inspection are,and what the risk responses to these audit risks are.The research methods of this paper are mainly literature study and case analysis.First of all,this paper reviews the previous theoretical research on audit risk,and decides to take the audit risk model as the main research theory.Secondly,starting from the GEM market,this paper studies the different environment between the GEM market and the main board market,as well as the potential audit risk of gem enterprises.Then,takingAsia Pacific accounting firm's audit failure of the growth enterprise's financial environment annual report as a case study,combining with theoretical research to identify its audit risk in both major misstatement risk and inspection risk,and from the perspective of certified public accountants,put forward the corresponding measures to deal with the gem audit risk.The research conclusions in this paper are as follows.GEM enterprises have their own unique audit risk points,including higher risks of going concern and fraud;CPA should focus on the external environment of the audited unit,corporate governance and strengthen the professional competence of CPA to deal with GEM audit risk.