Research On Audit Risk Of Goodwill Impairment Of Humanwell Pharmaceutical Based On Fuzzy Comprehensive Evaluation

With the booming and ever-changing socialist market economy with Chinese characteristics,in order to adapt to the new structure of the capital market and thereby create a more liberal regulatory environment for the restructuring of listed enterprises,the relevant regulatory authorities have introduced new policies to adapt to it and,at the same time,accelerated the mergers and restructuring of listed companies in China.Along with the continuous development of mergers and restructuring,problems and risks of mergers and restructuring have also emerged.Inflated post-merger consideration and unreasonable performance commitments are frequent and can lead to higher goodwill being recognised in the merger process if the premium ratio at the time of the merger is inflated.This ultimately led to a large number of goodwill impairment charges being made by many listed companies in FY2018,thereby attracting increasing attention from various parties in the asset market.An accounting regulatory report issued by the China Securities Regulatory Commission in July 2019 highlighted the "high scale" of problems in the area of goodwill and the unreasonable and incorrect impairment testing of goodwill by some companies,resulting in more new audit risks.This therefore requires the audit practitioner to audit the audit risks arising from goodwill impairment,to perform a thorough identification and accurate evaluation and finally to take effective countermeasures.Based on the risk-based audit theory and the background of China’s socialist system,this article intends to take Renfu Pharmaceutical as an example and establish a model for assessing the audit risk of goodwill impairment of Renfu Pharmaceutical from the perspective of a certified public accountant,and then study the identification,assessment and preventive measures of the audit risk of goodwill impairment of Renfu Pharmaceutical.The study first describes and analyses the goodwill and goodwill impairment issues of China’s A-share listed enterprises at this stage,then analyses the overall situation of goodwill impairment audit risk of China’s A-share listed enterprises through an in-depth study of the current situation of goodwill impairment in China,and uses Renfu Pharmaceutical,a typical representative of listed pharmaceutical enterprises,as a case study.We analyse the risks of material misstatement at the financial statement and determination levels of Renfu Pharmaceuticals,analyse the various risks and causes of the audit of goodwill impairment,and analyse the problems that arise when CPAs perform audits.Through the construction of an audit risk assessment and prevention model,the purpose of assessing and addressing the audit risk of goodwill impairment of Renfu Pharmaceuticals is achieved.After identifying and analysing the causes of the audit risk of goodwill impairment of Renfrew Pharmaceuticals,the risk indicator system structure and the risk assessment process are constructed from two levels: the risk of material misstatement and the risk of inspection,and the assessment conclusion is that the audit risk of material misstatement is high,the risk of acceptable inspection is low and the overall expected audit risk is high.The evaluation results are then used as an object to propose targeted responses to the audit risks that exist,taking into account the weighting of each risk factor.Finally,in the light of the current situation of the Chinese capital market and the content of the previous part of the study and the conclusions reached,the analysis is carried out to propose corresponding countermeasures to the risks that exist in the audit of goodwill impairment of listed companies in China in terms of material misstatement and inspection risk respectively.This thesis concludes,after research,that,firstly,auditors need to pay attention to the internal and external environment of enterprises,identify surplus management motives as well as assess the reasonableness of goodwill impairment tests.Secondly,auditors need to strengthen the supervision and management of internal auditors and related systems,build and improve a set of quality management systems,and conduct in-depth studies on them to ensure the professional standards of CPAs,so that they can conduct more in-depth studies and research on goodwill impairment accounting and other related laws and regulations,thus enhancing the professionalism of CPAs themselves,and conducting serious and responsible work attitudes towards auditors as well as The training of auditors in the ethics of due diligence reduces the risk of goodwill audits.