Research On The Impact Of Shell Preservation Behavior Of Enterprises On Audit Risk Under The New Delisting Rules

In order to improve the delisting efficiency,the exchange issued new delisting regulations at the end of December 2020,which added the financial portfolio index of "deduct the business income which has no commercial substance and has nothing to do with the main business < 100 million yuan and the net profit is negative if the deduction is lower",and enhanced the importance of the audit opinion index.At the same time,the delisting process was simplified and the delisting time was shortened to two years.In this context,this paper explores the differences in shell protection behaviors of enterprises under the new delisting rules and the changes in audit risks resulting therefrom,so that audit institutions can effectively respond to and play their regulatory responsibilities.This paper adopts the method of single case study to study the *ST Colin shell retaining behavior and its impact on audit risk after the implementation of the new delisting regulation.In 2020,*ST Colin used the proceeds of debt restructuring and the impairment reserve to return to adjust the non-recurring profit and loss and turn the loss into profit,the old rules under the shell successfully,and the introduction of the new rules led to its operating revenue less than 100 million yuan was continued to implement the delisting risk warning,In 2021,the company changed its controlling shareholder,transformed its business and set up a new subsidiary to actively generate income and avoid reaching portfolio indicators by means of revenue management.At the same time,the company changed its annual audit office and obtained standard unqualified opinions.However,it was questioned by the regulator and placed under investigation,and finally received administrative punishment for illegal information disclosure.According to the analysis,the new delisting rules intensified the motivation of *ST Colin shell,whose adjustment focus shifted from earnings management to revenue management,and shell means shifted from non-recurring profit and loss to adjustment of operating income.From the perspective of audit risk,the aggravation of *ST Colin’s shell protection motivation leads to the increase of its risk of material misstatement.The characteristics of shell protection means increase the difficulty of audit identification of Yongtuo Firm,and the combination indicators require Yongtuo firm to strengthen its professional judgment ability.By studying the market reaction caused by the delisting new regulation,this paper draws the research conclusion that the delisting new regulation intensifies the shell protection behavior of enterprises,the shell protection behavior of enterprises increases the audit risk,and the insufficient audit response affects the market clearing.In order to cope with the new delisting regulations,listed enterprises intensify shell protection behavior,which affects the reliability of their information disclosure and thus increases the audit risk.Under the new delisting rules,the risk of material misstatement of the enterprise will increase.Due to the hidden and unconventional behavior of shell protection under the new rules,the rationality of shell protection means is still lack of mature evaluation criteria,and the firm itself may have subjective collusion intention,the audit risk will also increase.On the basis of this conclusion,this paper proposes that audit institutions should pay attention to shell motivation,improve audit prudence,adjust audit focus,focus on revenue management,guard against changes of the club,and evaluate audit risks.The supervision department strictly inquire,standardize the audit practice,punish the delay reply,accelerate the market clearing proposal.Based on the research from the perspective of market reaction of the delisting new regulation,this paper not only enriched the literature research on the delisting new regulation and the market reaction generated by it to a certain extent,In addition,combined with the analysis and results of specific cases,it also provides practical reference for the determination of auditors’ key audit matters under the new delisting rules,the changes in key areas of audit,and the increase of professional vigilance on corporate behaviors such as the rehiring of firms and the increase of audit costs.At the same time,it also provides possible key reference for market regulation,so as to further accelerate the process of survival of the fittest and investment specialization.We will concentrate resources on high-quality enterprises and accelerate the liquidation of tail enterprises.