Research On Audit Risk Identification And Response Of Goodwill Impairment

In recent years,due to sustained economic growth and increasingly fierce market competition in China,many companies have increased their investment intensity and triggered a wave of mergers and acquisitions in the capital market.In 2016,the total transaction volume of M&A reached RMB 1.84 trillion,and the huge scale of mergers and acquisitions brought huge goodwill to the securities market,and since 2017,the total goodwill of the securities market has continued to rise,and has remained above1.2 trillion yuan.With the large high-premium M&A,market competition and the development environment of the acquired entity have changed dramatically,and if the acquired party fails to meet the performance targets set at the time of the acquisition,it will lead to a significant impairment of goodwill.Since 2018,the rise of corporate mergers and acquisitions has led to the phenomenon of goodwill impairment in a large number of enterprises,which has become more and more serious,making the issue of goodwill impairment increasingly serious.With the increasingly serious phenomenon of goodwill impairment in the capital market,the overall evaluation of enterprises and stock price fluctuations have been greatly affected,which also brings great challenges to the operation of securities trading.As a large number of enterprises face serious goodwill impairment problems,audit institutions are also facing audit risks.There have been numerous cases of audit failures of listed companies by accounting firms in the securities market,resulting in regulatory sanctions and measures such as inquiry letters and warning letters for these firms,certified public accountants,and appraisal institutions.The full paper is divided into six chapters.The first chapter is an introduction,which discusses in detail the background and significance of the research in this paper,and conducts an in-depth analysis of the literature related to goodwill impairment and audit risks at home and abroad,and finally puts forward a complete research technical route.In the second chapter,various definitions and basic theories of goodwill and goodwill impairment audit risk are introduced in depth,including information asymmetry theory,principal-agent theory,fraud triangle theory and modern risk-oriented audit theory.The third chapter focuses on the goodwill and impairment of listed companies in China,and conducts in-depth research and analysis on the phenomenon of goodwill impairment in China’s securities market by using case analysis method and literature research method,combined with a series of theoretical knowledge.In recent years,the audit failures of A-share listed companies by accounting firms are worrying,so this article takes audit risks as the starting point,discusses in depth various problems that accounting firms may encounter when auditing goodwill impairment matters,and puts forward audit risks that certified public accountants should pay special attention to in the audit process.Chapter 4 takes Zhongchang Data as an example to provide a comprehensive analysis of the initial recognition and impairment of its goodwill,and describes in detail the audit procedures implemented by the auditors in order to better understand its audit situation.After analysis,the firm found that there was a risk of material misstatement and inspection risk when the firm conducted a goodwill impairment audit of Zhongchang Data.Therefore,the conclusion of this study shows that in order to prevent the risk of goodwill impairment audit,Chapter 5 will provide effective preventive measures from different perspectives,mainly: increasing attention to goodwill disclosure,strengthening market supervision,improving the quality management system of the firm,further optimizing the goodwill impairment audit procedures,and further improving the professional competence of certified public accountants.Chapter 6 is a summary of the full text,summarizing the conclusions of this study and the shortcomings in this study,and proposing the direction of future research.Based on the audit perspective,this article conducts an in-depth analysis of Zhongchang Data,elaborates on the risks of goodwill impairment audit that may occur in the audit process of accounting firms,and puts forward effective preventive measures to ensure the long-term stable development of the company.The research in this paper aims to provide useful suggestions for preventing goodwill impairment audit risks and contribute to the enrichment of relevant literature research.