Study On Audit Risk Response Of Performance Announcement "Change Of Face"

Earnings forecast disclosure we formulated and implemented since 1998,its purpose is to through the requirements of the listed company in the event of a loss or major performance changes in earnings information in advance,in order to satisfy the requirement of the investor to the enterprise information timeliness,help them to make more scientific decision,the implementation of the system can effectively relieve investors and listed companies,the information asymmetry between the It plays a positive role in protecting the interests of small and medium investors.However,in recent years,the phenomenon of "changing face" of performance announcement of listed companies in China has increased,which deviates from the original intention of implementing the system.The huge change from profit to loss takes investors by surprise,damages the interests of minority shareholders and disturbs the order of capital market.The audit risk reflected by the performance announcement "face change" has also attracted the industry’s attention.Cicpa has repeatedly invited accounting firms to pay more attention to the audit risk of the performance announcement "face change" of listed companies.The factors affecting the "change of performance forecast" include external environment such as macro environment change and industry environment mutation,as well as internal reasons such as enterprise internal management and management earnings manipulation.No matter which kind of audit risk factors may constitute audit risk factors,that is to say,audit risk factors and performance forecast "face change" factors have a common.However,there is still a lack of relevant research on how auditors should view and deal with audit risks under the circumstance of "reversal" of earnings forecast.Based on this,this paper takes Jiadian As the case analysis object,analyzes the correlation between the "change of face" of performance forecast and audit risk,and provides a new path for its audit risk analysis.As a leader in the motor industry,Jidian’s financial fraud and audit failure have a strong market reaction and a huge negative impact.In 2014,the motor industry faced the survival pressure of macroeconomic adjustment and industry demand shift.Under the circumstance that the industry demand of explosion-proof motor gradually shifted from traditional ordinary motor to drive motor,the business of various regions and all kinds of products gradually shrank,increasing the performance pressure of the company.Jidian shares eventually increased its profits by 39.94 million yuan by means of less carry-over operating costs and sales expenses.The fraud means are single and universal.Although it is not enough to "turn losses into profits",it is typical to cause obvious performance changes and violent market reactions.Dahua Accounting Firm,which is in charge of the annual report audit,was severely punished by CSRC for the defects in the audit procedures,with a high and representative penalty amount.This paper first analyzes the process and disclosure of jiadian’s performance announcement "face change",and then analyzes the authenticity and integrity of the attribution of the management’s performance announcement "face change".Then the audit risk factors found in the above analysis are identified as the audit risk at the financial statement level and the identification level of Jia Dian Stock.Then on the basis of the analysis of dahua ACCOUNTING firm did not implement appropriate audit procedures to deal with audit risks,resulting in the performance of audit failure and reasons.Through the case study,this paper finds that the fraud of Jia Dian shares is indeed difficult to find,but it is not untraceable.First of all,the performance forecast "face change" provides a huge performance fluctuation signal,according to which we can find that the company’s business,assets profitability is gradually weakened,internal management also exists in name only;Secondly,the horizontal and vertical changes of inventory goods,operating cost,asset impairment loss and other items also have many doubts.Therefore,when confronted with the auditee whose performance notice "changes face",CPA can analyze rationality from the perspective of influencing factors of performance change and find audit risks.Finally,this paper proposes how auditors,CPA firms and regulators should strengthen the audit risk response measures to the "face change" of performance announcement.