Study Of Audit Risk In The Context Of High Premium Mergers And Acquisitions

In recent years,mergers and acquisitions have been favoured in the capital markets as a powerful means of corporate expansion.Due to the complexity of high premium mergers and acquisitions,accounting firms are exposed to higher audit risks when undertaking such audits in the years following the merger.The study of audit risk in high premium M&A in traditional industries,which are one of the country’s major economic sources,is important for improving the quality of corporate governance and can provide practical guidance for audit work.The purpose of this paper is to explore the case of Yongan Forestry’s acquisition of Senyuan Furniture,and the study is structured as follows: Chapter 1 outlines the background and significance of the study;Chapter 2 provides an in-depth description of the concept of high premium M&A and its related theories;Chapter 3 describes the specific circumstances of the case in detail,including the basic overview of the parties,a review of the M&A transaction process and the M&A irregularities and audit risk points in the industry;Chapter 4is based on the audit risk model and provides an in-depth analysis of the audit risk from Chapter 4 provides an in-depth analysis of the audit risk of the high premium M&A of Yongan Forestry based on the audit risk model,from three levels: financial statement level misstatement risk,determination level misstatement risk and inspection risk.In particular,in the analysis of corporate financial risk,the SPSS software is used to quantitatively describe the financial risk in Yongan Forestry’s financial reports and evaluate the level of financial risk in Yongan Forestry’s industry.In Chapter 5,effective audit risk prevention measures are proposed in conjunction with the audit risk analysis conducted above.The final chapter draws conclusions and summarises the recommendations and shortcomings.Based on the theoretical and case analysis,this paper concludes the following: First,the capital market requirements for the quality of M&A transactions are increasing year by year,and M&A needs to be cautious.Second,auditors should pay attention to the characteristics of furniture manufacturing industry and the main audit risk areas of the industry.Third,after Yongan Forestry acquired Senyuan Furniture,even after the integration of resources,the expected synergy effect before the merger did not materialize,so the overall operating results did not improve as expected.Fourth,based on the audit process of Yongan Forestry by the accounting firm and Yongan Forestry’s own internal control report,the audit focus areas of Yongan Forestry are summarized in seven areas.The article’s research focuses on audit risks after high premium mergers and acquisitions,and after the previous comprehensive analysis,the following four key recommendations are made: First,strengthen the auditors’ emphasis on quality and adhere to the professional code of ethics.Second,carefully consider whether to accept business engagements from high-risk clients.Third,verify the true profitability of the audited company and adopt more effective audit procedures.Fourth,increase supervision during project audits process.