Research On The Identification And Response Of Audit Risk Of City Investment Bond Of JX City Investment Company

With the implement and practice of Tax sharing system,the enthusiasm of all levels in local governments has been stimulated.Local governments own more autonomous right under the theory of Tax sharing system.But with the increasing pressure of financing in local governments,local income funds cannot satisfy the need of local construction and development so that some local governments have to depend on some state-owned investment companies which are controlled by local governments for government borrowing to offset the funding gap.This kind of state-owned investment company is generally called city investment company,which is mainly responsible for the construction and management of all kinds of local city infrastructure and raises funds by issuing city investment bonds.The government attribute of city investment company determines that the financial information such as assets,liabilities and income disclosed in its financial statements cannot fully reflect the results of market-oriented operation,which deviates from the provisions of the standards to varying degrees.For the audit work of certified public accountants,the particularity of business nature affects the assessment of the risk of material misstatement of financial statements and the assessment of the solvency of city investment company.As the CSRC did not make specific requirements for the information disclosure of urban investment bonds,it increased the difficulty of the audit of city investment bonds,and also increased the audit risk of certified public accountants.With the increase of default cases,the CSRC and the local CSRC began to pay attention to the inspection of city investment companies.For the certified public accountants,they will face the challenge of whether the audited financial report of city investment company has significant misstatement.Therefore,it is increasingly important to identify and respond to the audit risk of city investment bonds.Based on the modern risk oriented audit theory,principal-agent theory,entrusted responsibility theory and audit "immune system" theory,this essay analyzes the city investment debt by combining theory and case analysis,according to the characteristics of the city investment debt audit,combined with RC accounting firm's audit of JX city investment company's urban debt,and based on the risk identification of financial statement level and specific identification level,this paper analyzes the audit risk and Countermeasures in the audit process of city investment bonds.The business attributes of the city investment company have doubts about the authenticity of assets recognition,income and profit,and also directly affect the evaluation of solvency.At the same time,the pressure of debt repayment has brought corrupt motives to management.There may be substantial misstatement risks at the level of financial statements.On the other hand,the composition and quality of current assets and long term assets,the way to realize profits,the scale of financing and the occupation of funds will also have a direct impact on the accuracy and completeness of income and cost,the integrity of financial costs,the valuation and allocation of inventory and intangible assets and so on.This paper analyzes the risks that may exist in the above financial statement level and the specific identification level,and puts forward feasible countermeasures.