Research On IPO Audit Risk Of Pharmaceutical Manufacturing Industry

In recent years,with the reform progress of my country’s A-share market Science and Technology Innovation Board,Beijing Stock Exchange financing policy,and registration system from pilot to implementation,unprofitable companies have embarked on the road of IPO,during which IPO new stock fraud incidents have occurred from time to time.As an industry with high technology investment,high capital investment and long investment return period,the pharmaceutical manufacturing industry itself has relatively large risk fluctuations.On the other hand,the pharmaceutical manufacturing industry,as a national key regulatory industry,is highly dependent on policies.The adjustment and update of medical insurance policies,the reform of drug pricing and bidding,and the "two-invoice system" of prices in the circulation field will lead to adjustments in corporate products,prices,and sales methods,as well as major changes in operating methods and gross profit margins.Therefore,pharmaceutical manufacturing enterprises are facing certain profit pressure.Some companies planning to go public have the impulse to make financial frauds in order to obtain higher valuations and financing quotas,which leads to increased audit risks.At present,there are also a considerable number of failed IPOs of pharmaceutical manufacturing companies in the A-share market,such as Shanghai Haihe,Zhongjiankangqiao,and San Huaxi.The main reasons are inaccurate and blank information disclosure.To this end,the China Securities Regulatory Commission focused on inquiring about sales expenses,commercial bribery involved in the transparency of drug distribution links,and the authenticity of sales revenue.The key points of the above inquiries are not only related to the inherent operation and management level of the companies planning to apply for IPO,but also the intermediary agencies are not without responsibilities.Audit institutions should be diligent and responsible,pay close attention to the inherent risk characteristics of the industry,and ensure the reliability of the quality of financial information disclosure through risk control methods.For this reason,from the perspective of the firm,this article takes Tianjian Accounting Firm’s audit of the IPO project of Shanghai Renhui Biological Co.,Ltd.The "voluntary withdrawal" behavior at the stage is regarded as a risk signal,and the concept of modern risk-oriented audit is practiced,and the source of audit risk is explored from the specific conditions of each link of strategy and operation.Specifically,this paper first sorts out and reviews the existing literature to determine the level of research;secondly,starting from the status quo of China’s IPO review,it analyzes the system,market status,inquiry text and industry environment,and explains the pharmaceutical manufacturing enterprises.Common problems in the listing process and sources of audit risk;then select Renhui Biological IPO as a case,and analyze the risk of major misstatement and audit inspection risk in the audit of IPO projects in the pharmaceutical manufacturing industry based on the modern enterprise risk-oriented model;finally,combined with strategic management theory Based on the theory of system auditing,it analyzes the strategic risk,operation link risk and control risk of Renhui Biology,and finds major misstatement risk points such as the authenticity of income and the rationality of sales expenses.Further,this paper organizes and evaluates Tianjian Certified Public Accountants’ design,arrangement and implementation of risk response audit procedures in terms of risk inspection.In the future,accounting firms need to focus on the significant risk points in the pharmaceutical manufacturing industry.While protecting their own independence,they should promote the improvement of their professional ability through internal and external governance;The industry intends to provide efficient counseling services for companies planning to go public.