Research On The IPO Audit Risks Of STAR Market Under Registration System

On February 17,2023,the China Securities Regulatory Commission issued the rules for the comprehensive implementation of the stock issuance registration system,marking that China has officially entered a new stage of fully implementing the registration system.On November 5,2018,STAR Market was established on the Shanghai Stock Exchange as the first innovative board to issue shares under registration system.At present,it has been nearly four years since the first batch of companies listed on the STAR Market.Companies that apply to the registration system for issuance and listing have clearly shown different problems and characteristics from those under the previous approval system in the process of application,review and registration and listing.Under registration system,regulatory agencies delegate the autonomy of information disclosure to companies that plan to go public,while fully compacting the intermediary’s responsibility as the "gatekeeper" of the capital market.The issuance of IPO audit reports by accounting firms is a key link.The research on IPO Audit risk under the background of registration system will help auditors to clarify the common Audit risk points in this business,so as to design audit procedure reasonably,improve audit quality,and ensure the quality of information disclosure in the process of IPO.This paper first combs the relevant literature,and then analyzes the causes of IPO audit risk of STAR Market based on the modern risk-oriented audit theory,principal-agent theory and fraud triangle theory.Then,it compares and analyzes the institutional background and listing standards of STAR Market with other sectors,and collates the key points of the 18 enterprises that have terminated their registration and were inquired by the CSRC at the registration stage,so as to speculate the common risk points of the IPO audit of STAR Market.This paper uses the case analysis method,selects Hang Ke Technology Company,a listed company on STAR Market,as the research object,and summarizes the audit risks in the IPO audit of Hang Ke Technology Company.The research results of this paper show that the new risk points in the IPO audit of STAR Market due to the characteristics of the sector and system are the risk of information disclosure and the risk that the enterprise does not conform to the nature of Sci-Tech innovation.The risk of material misstatement on the level of financial statement in the IPO audit of risk is mainly reflected in the operational risk related to the financial statements,internal control risk and fraud risk.The risk of material misstatement on the level of assertion is mainly the risk related to revenue,the impairment risk of accounts receivable and notes receivable,and the risk related to research and development expenditure.The detection risk is reflected in three aspects: the auditor lacks expertise in the Sci-Tech innovation industry,the reply to the inquiry letter does not conform to the facts,and the quality control ability of the accounting firm is poor.The purpose of this paper is to summarize the common risk points in the IPO audit of STAR Market under the background of the registration system,enrich the relevant literature of the IPO audit of STAR Market,provide suggestions for improving the quality of the IPO audit of the STAR Market,with a view to promoting the healthy and stable development of STAR Market,and provide advice for the IPO audit after the implementation of the registration system in all capital market.