Research On Material Misstatement Risk In The Sales And Collection Cycle Of YG Pharmaceutical Company

For listed companies in the pharmaceutical wholesale and retail industry,rapid economic development has enabled people in China to completely solve the problem of food and clothing,and more and more people have begun to pay attention to physical health.,coupled with the problem of aging population,resulting in the formation of a huge market demand for pharmaceutical companies among consumers.However,in recent years,the overall economic development of China has slowed down due to the impact of the new crown epidemic,and the competition between large and small companies in the industry has intensified,which has had a negative impact on the overall economic development of China.Since YG Pharmaceuticals in the industry involves more than one hundred stores with an average of more than 7,000 sales categories per store,it is conceivable that the complexity of its sales and collection business processing,so this paper selects YG Pharmaceuticals as a case company to study and analyze the potential material misstatement risk in the pharmaceutical wholesale and retail industry,with a focus on the sales and collection cycle.Many scholars at home and abroad have conducted in-depth studies on the three aspects of sales and collection cycle audit,material misstatement risk assessment and AHP-FCE assessment method,and have formed a relatively mature research lineage.However,the current research on the sales and collection cycle relies on the subjectivity of auditors,and the assessment methods lack relevance,and there are fewer applications of AHP-FCE in the audit field.Therefore,in this paper,we analyze the risk of material misstatement in the sales and collection cycle of pharmaceutical wholesale and retail industry,summarize the corresponding influencing factors,assign weights to the influencing factors using hierarchical analysis(AHP),construct an assessment index system,and then apply fuzzy comprehensive evaluation(FCE)to analyze the potential risk of material misstatement in the sales and collection cycle of YG Pharmaceuticals,and finally provide corresponding countermeasures from the auditors’ perspective.The general logic of this paper is divided into six main sections as follows.The first part briefly introduces the background and significance of this paper,as well as the related concepts and theories,the current research status of sales and collection cycle auditing,material misstatement risk assessment methods,the application of AHP-FCE assessment method,and the research innovations and shortcomings of this paper.The second part analyzes the overview of pharmaceutical wholesale and retail industry and its material misstatement risk,and then compares different methods of material misstatement risk assessment to explain the applicability of AHP-FCE assessment method for sales and collection cycle audit of pharmaceutical wholesale and retail enterprises.The third part introduces the design basis of the assessment index system for the material misstatement risk of the pharmaceutical wholesale and retail sales and collection cycle,and then constructs the material misstatement risk assessment index system step by step.The fourth section applies the constructed indicator system to YG Pharma and derives the assessment results,i.e.,the potential material misstatement risk in the sales and collection cycle of YG Pharma.The fifth section analyzes the causes of YG Pharma based on its profile and the derived assessment results.In the sixth part,based on the causes,we propose audit recommendations from the perspective of the auditors of the accounting firm on how to identify the potential material misstatement risks in the sales and collection cycle of YG Pharmaceuticals through the design of audit procedures.