Research On The Prevention And Response Of Goodwill Impairment Auditing Risk

What is the nature and connotation of goodwill,how to recognize and measure goodwill has always been one of the classic topics in the theoretical research of accounting world.Since 2014,corporate mergers in China's capital market have continued to rise and peaked in 2015.At the same time that large-scale M&A brought a sharp rise in the stock market,they also gave rise to high valuations of the target of M&A,entered into high performance commitments,generated a large number of high-premium M&A,and continued to expand the scale of A-share goodwill.The risk of goodwill impairment has continued to build up and reached its highest level in 2018,when the performance commitments are centrally due.The impact of goodwill on financial statements has attracted attention from all sectors.The huge goodwill impairment of A-shares at the end of 2018 has once again become the focus of discussion and research.The uncertainty of the subsequent measurement of goodwill accounting estimates and the complexity of the impairment test process have long brought greater difficulties to financial accounting and CPA audits.In addition to the large subjectivity of initial recognition and measurement of goodwill and impairment test,it has become an important and high-risk area in the audit of the financial statements in the context of the current large-scale goodwill and huge goodwill impairment.Therefore,it is of great practical significance to carry out the research on audit risk prevention and response related to goodwill impairment.First of all,on the basis of the collation and analysis of the relevant literature,this paper provides a statistical description of the current overall situation and distribution of the industry of the goodwill and its impairment of listed companies in China.From the perspective of industry characteristics,the reasons for the outstanding issues of goodwill and impairment of goodwill in the media industry are analyzed.Secondly,this paper selects the audit report of the A-share listed company as a sample,and understands the implementation status of the CPA's goodwill impairment audit by breaking down the statistics on the main audit measures against the impairment of goodwill listed in the Key Audit Matter.The audit risk of goodwill impairment is analyzed based on the goodwill impairment audit risk model,and the identification framework of risk of material misstatement of goodwill impairment is constructed.In addition,based on the implementation status of goodwill impairment audit and combined with the results of the CSRC's summary of the relevant administrative supervision measures,the main risk points of detection risk of the current goodwill impairment audit are summarized by the audit service phases.Thirdly,this paper selects the representative listed company audit case of the media industry for case study.After a comprehensive elaboration of the goodwill formation and subsequent measurement process of the case company,the risks of material misstatement of the project's goodwill impairment were identified and the goodwill impairment audit risk of the project was analyzed based on the goodwill impairment audit risk model.This paper analyzes the implementation of the audit of the company's goodwill impairment by certified public accountants,and then summarizes the issues that may lead to detection risks.It verifies the conclusions based on statistical analysis and literature collation,and analyzes the causes of the problems based on the case background.Finally,this paper puts forward the countermeasures and suggestions for the prevention and response to goodwill impairment audit risk,including optimizing the audit procedures of CPA,improving the goodwill accounting standards,developing the asset appraisal industry,perfecting corporate governance and internal control,and perfecting the legal system and supervision mechanism.Through the research,this paper hopes to provide some reference for the CPA to carry out audit on the impairment of goodwill in the future,and provide some reference for preventing and responding to the audit risk of goodwill impairment.This paper cuts in from the audit perspective and audit risk,and also hopes to enrich the relevant literature of goodwill impairment test and goodwill recognition and measurement to a certain extent.