Research On Audit Risk Identification And Response Of Internet Game Enterprises

Under the background of rapid development and continuous updating of Internet technology,China’s Internet and its related game industry have also been developed rapidly,and the scale of the Internet game market has been expanding.The virtual nature of Internet game products makes the business model and profit model of Internet game enterprises different from those traditional enterprises,so when auditing Internet game enterprises,CPAs are faced with more complex and diversified audit risks different from those of traditional enterprises.At present,there are relatively few studies on audit risks of Internet game enterprises in China’s academic circles,and the social practice and the theoretical research is not yet sufficient and perfect.In order to enrich China’s audit risk research and improve the audit quality of China’s Internet game enterprises,it is necessary to carry out research about the identification and analysis of audit risks of Internet game enterprises according to their unique characteristics under the current situation of rapid development of the Internet game industry.On account of modern risk-oriented audit theory,principal-agent theory and fraud triangle theory,selects a typical Internet game enterprise,Company B,as an example,and conducts a study on the identification and response of its audit risks.This paper first summaries and composes the relevant research on audit risk,including the meaning,causes,identification and control and prevention of audit risk,clarifies the research progress of the topic and establishes the research direction.Then clarifies the elemental features of Internet game enterprise and then clarifies the audit characteristics including the three aspects of strong audit professionalism,high audit complexity and low reliability of audit evidence,as well as the audit risk of Internet game enterprises in terms of policy,market.Then it chose to take a typical Internet game enterprise,Company B,as an example,to identify the material misstatement risks of Company B listed on GEM in the context of the characteristics of GEM-listed companies and the current situation of auditing,from two aspects of material misstatement risks at the financial statement level and material misstatement risks at the determination level,and clarified the material misstatement risks at the financial statement level faced by Company B in the audit,including External environment risk,sustainability risk,profitability risk,and strategy risk,and determination level material misstatement risk,including foreign currency business risk and revenue recognition risk.Based on the audit risk content of Company B,responses to the above risks are proposed based on Company B’s financial reporting and auditing standards in terms of material misstatement risk at the financial statement level and material misstatement risk at the determination level respectively.Finally,based on the analysis of Company B’s case,the following policy recommendations were made at the macro level,company level and accounting firm level to prevent the audit risks of Internet game enterprises: develop the SME bond market,strengthen the development and supervision of original Internet games,add currency exchange rate risk clauses to contracts,extend the life cycle of existing game products,improve the company’s talent recruitment mechanism,reasonably allocate R&D income,and enhance the professional competence of firm staff.This paper provides an in-depth analysis of the audit risk points of Internet game enterprises,proposes measures to address the audit risks in the audit of Company B,and further proposes countermeasures for the prevention of audit risks of Internet game enterprises at the level of the Internet game industry based on the highly informative characteristics of Internet games,with a view to providing auditors with the opportunity to effectively identify the audit risks of Internet game enterprises and improve audit quality in the audit process of Internet game enterprises.The purpose is to provide some help for auditors to effectively identify audit risks of Internet game enterprises and improve audit quality and efficiency in the audit process of Internet game enterprises.