Research On The Identification And Assessment Of Material Misstatement Risk In Financial Reporting

With regard to the shortcomings shown in the traditional audit risk model and the intensification of capital market fraud in recent years,China has actively converged with international auditing standards,formulated and revised auditing standards that are in line with China’s actual situation,and the discussion on the risk of material misstatement is also very enthusiastic.Economic globalization has opened up a new situation for the world economy,strengthened international exchanges,broadened the capital market,but at the same time brought increasing risks,in order to ensure the good operation of the capital market,the healthy development of enterprises,how to identify and evaluate risks and reduce risks is an important topic.In modern risk-based audits,the results of material misstatement risk assessments affect the operation of the audit process and even play a key role in the direction of the final audit opinion.Therefore,this paper selects hot cases of current affairs,studies the identification and assessment of the risk of material misstatement in financial reports,and puts forward suggestions for preventing risks.This paper combines the relevant literature at home and abroad on the risk of material misstatement at the financial reporting level and the risk identification and assessment method,and uses the entropy weight-TOPSIS method to study the risk assessment of material misstatement at the financial reporting level,taking Company Z as the research sample.Firstly,the introduction of the first chapter mainly introduces the research background and research significance,and sorts out the relevant research on the material misstatement risk of financial statements at home and abroad,as well as the characteristics and characteristics of the material misstatement risk in the industry where Company Z is located.Secondly,the concepts and theories related to the risk of material misstatement under modern risk-oriented audit are introduced,and the theory of entropy weight method is mentioned,and the financial fraud events of Company Z are reviewed and the material misstatement risk of Company Z is described under the occurrence of fraud.Then,taking Company Z as a research case,the entropy weight-TOPSIS method is used to calculate the entropy,difference coefficient and weight of the evaluation index,and then the risk size is obtained,and the ranking is obtained,and the conclusion that the risk of material misstatement increases year by year from 2015 to 2019,and combined with horizontal and vertical comparative analysis,the conclusion is more realistic,which can bring effective evaluation and warning to actual operation.Finally,through the collation of assessment results and the actual situation of enterprises,relevant suggestions for risk identification and assessment are put forward.