The Identification And Response Of Audit Risk Under The Performance Commitment Of M & A

Enterprise mergers and acquisitions,as a way to optimize the industrial structure of enterprises and an effective way to integrate enterprise resources,have always been popular.With the rapid development of China’s economy and the continuous changes in the capital market,many listed companies are enhancing their long-term development and expanding their business scope through enterprise mergers and acquisitions activities.However,there are also many listed companies that,after completing corporate mergers and acquisitions,not only fail to improve their economic benefits,but also cause their development to fall into development difficulties.In enterprise merger and acquisition activities,the negative impact of information asymmetry may lead to the phenomenon of the acquiring company’s unreasonable asset evaluation of the acquired party,which is not conducive to the business development of both companies.Performance commitments can effectively reduce this impact,increase the likelihood of smooth M&A activities,and enhance investors’ trust in the company.However,some of the merged enterprises want to show their good business ability to the acquirer and set a high performance commitment target,but ignore the key issue of whether they can achieve the target,which brings pressure to the enterprise’s operation.However,when the merged enterprises find it difficult to achieve the set performance target after the completion of the merger and acquisition transaction,in order to avoid compensation,the enterprise management has the motivation to conduct financial fraud,Higher fraud motivation undoubtedly increases the audit risk of certified public accountants when auditing enterprises.In recent years,the negative impact of the performance commitment mechanism has become increasingly obvious.Therefore,when auditing listed companies involving performance commitments,certified public accountants should pay special attention to the root causes of audit risks,analyze the specific formation path,and then make corresponding risk response measures according to the risk assessment results.Based on the theory of modern risk-oriented audit,this paper analyzes the audit risks that the certified public accountants may face under the performance commitment of mergers and acquisitions,taking Suya Jincheng Certified Public Accountants’ audit of Kangni Electromechanical Co.,Ltd.as a case.The article introduces and analyzes the case,and then combines the relevant theories to analyze the audit risks that may occur under the performance commitment of listed companies from two major aspects of major misstatement risk and inspection risk.Among them,the major misstatement risk is analyzed in two stages,one is the enterprise merger and acquisition period,and the other is the performance commitment period.Finally,according to the audit risks analyzed,the corresponding risk countermeasures are proposed.This paper links the special financial mechanism of performance commitment with the formation of audit risk,and studies the relationship between them,so as to make the abstract alias of audit risk concrete and enrich the research content.Moreover,with the development of society,more and more enterprises will choose to sign performance commitments when conducting M&A transactions.On the one hand,the research in this paper can enable certified public accountants to pay more attention to the audit risks they may face in the audit process;On the other hand,studying the countermeasures to audit risks under the performance commitment of mergers and acquisitions can help certified public accountants quickly identify the audit focus under this mechanism,thus helping to improve the efficiency of audit work and reduce the occurrence of audit failures.