Study On Audit Risk And Prevention Of Guidong Electric Power Company Audited By Accounting Firm

In recent years,the reform of the registration system has been continuously promoted and will be implemented on February 1,2023.The audit responsibility of certified public accountants to the auditee has been strengthened,and the responsibility and audit risk undertaken by accounting firms have been increased.With the continuous improvement of laws and regulations on corporate fraud by China Securities Regulatory Commission,the continuous improvement of supervision level and the continuous strengthening of investor protection,the audit of listed companies by accounting firms,as an important means to improve the reliability of financial reports,is becoming more and more important to the securities market.However,as the market environment keeps changing and the company’s business activities become increasingly complex,misrepresentation,insider trading,information disclosure violations,market manipulation and other behaviors of listed companies occur frequently.Audit failures of accounting firms emerge in endlessly,and the constructive liability of accounting firms and other professional service institutions for illegal behaviors such as corporate information disclosure and violation guarantee is constantly increasing.The audit risks undertaken by accounting firms have increased greatly.Based on modern risk-oriented audit and domino theory,this paper adopts comparative analysis method and case analysis method to discuss the audit risk of DS accounting firm in the audit of Guidong Electric Power Company.This paper analyzes the problems of DS accounting firm in the audit of 2020 financial statements of Guidong Electric Power,such as not fully identifying the financial risks of the audited entity,not paying attention to the large amount of projects under construction,and being less sensitive to the current funds of the entity.And the causes of audit risk of DS accounting firm include: no professional suspicion of abnormal signals of the auditee,lack of attention to the impact of litigation risk of the auditee on audit opinions,control testing,improper implementation of control testing and non-strict implementation of substantive procedures.Countermeasures and suggestions for accounting firms to prevent audit risks are put forward,including improving auditors’ attention to abnormal signals,understanding of over-guarantee behavior and awareness of obtaining external information,creating an information risk warning platform,optimizing audit program design and improving the implementation standards of audit procedures.Audit risk is an objective existence for accounting firms.Certified public accountants should strengthen the prevention of audit risk by improving audit quality and strengthening professional suspicion.This paper studies the audit risk of DS accounting firm’s audit of Guidong Electric Power Company from the perspective of external audit of accounting firms,aiming to provide reference for accounting firms to face audit risks,and provide reference for accounting firms to prevent audit risks.Audit risks are objectively present for accounting firms,and registered accountants should strengthen their prevention of audit risks by improving audit quality,strengthening professional skepticism,and other means.This paper analyzes the audit risk of DS accounting firm’s audit of Guidong Electric Power Company from the perspective of external audit of accounting firms,aiming to provide reference for accounting firms to face audit risks,and provide reference for accounting firms to prevent audit risks.