Research On Audit Risk Control Of Subsequent Accounting Firms Under The Change Of Accounting Firms

In recent years,financial fraud in the capital market has occurred frequently,and the news that accounting firms have been punished is not uncommon.As investors increasingly regard audit opinions as one of the important investment bases,listed companies are more cautious about the choice of audit institutions.Over the past five years,more and more listed companies in China have changed their accounting firms,from 230 in 2016 to 693 in 2019.In2020,as many as 405 listed companies have changed their audit institutions.As far as the accounting firm itself is concerned,when undertaking new business,especially the listed company that has changed the firm,it should maintain full professional prudence and professional suspicion,and identify,evaluate and deal with the audit risk by analyzing the motivation of the listed company to change the accounting firm.This paper focuses on the hot phenomenon that listed companies frequently change audit institutions in the current capital market.By collecting and reading relevant literature at home and abroad,this paper fully understands and grasps the cutting-edge theoretical ideas and research trends in academic circles.On this basis,it combs the concepts of "accounting firm change","audit risk" and "risk control",and summarizes the basic theories such as information asymmetry.In addition,this paper shows the current situation of China’s listed companies changing accounting firms through the official data of China injection Association and other platforms,and leads to the motivation of this behavior and the audit risk of the subsequent certified public accountants.This paper takes W company as a case company and introduces the event that the company changed the audit institution in 2020 and was issued with a qualified audit report.Through this event,the article starts with the analysis of the motivation of the listed company to change the audit institution,combined with the basic situation of W company’s industry and the company’s internal environment,and then analyzes the possible audit risks of the subsequent accounting firm.In this case,the successor accounting firm of W company not only found the financial misstatement during the audit period,but also focused on the correctness of the opening balance.This fully shows that Shangkuai accounting firm has maintained sufficient professional prudence and reasonably controlled the possible audit risks when undertaking the annual report audit business of W company.By analyzing how to carry out effective risk control after W company changes the audit institution,Shangkuai accounting firm,as the successor audit institution,can put forward effective suggestions for audit practice,which has a certain reference significance.As the maintainer of the capital market order,accounting firms need to deal with a variety of audit risks,but compared with continuous audit,undertaking new customers often means higher risks.Therefore,the firm should maintain sufficient vigilance,carefully select customers,effectively identify and evaluate potential risks on the basis of fully understanding the auditee,and deal with audit risks by means of communication with former accountants,so as to achieve the purpose of controlling audit risks.