Research On Identifying And Coping With IPO Audit Risk Of Pharmaceutical Enterprises Under Registration System

In the new era,the registration system reform has become the key and inevitable trend for the overall deepening of China’s capital market.At present,China’s policy of stabilising the economy and preserving growth continues to take effect.Optimisation and adjustment of epidemic prevention and control measures have been gradually implemented.Economic operation is picking up.The development of enterprises is on track,and IPO fever will continue to rise under the full registration system.The pharmaceutical industry is an important part of China’s national economy.With the continuous improvement of people’s living standards,the gradual improvement of the medical security system and the aggravation of the aging trend of the population,China’s pharmaceutical industry has shown a good development trend and become one of the fastest growing industries at present.The substantive audit function under the registration system is devolved to intermediaries.As pharmaceutical companies are usually characterised by high technology intensity,long R&D cycles,high R&D investment and continuous losses before commercialisation of highly competitive products,there is a natural incentive to embellish and retouch financial statements in order to IPO as soon as possible.This creates greater audit risk for accounting firms.How to identify and address the audit risks of pharmaceutical IPOs under the full registration system,improve the quality of audit work and reduce legal liability has become a key concern for accounting firms.This thesis provides a detailed review of domestic and international IPO audit risk,IPO audit risk under the registration system and related research on the audit of pharmaceutical enterprises.Based on theories such as information asymmetry,principal-agent theory and modern risk-oriented audit theory,this thesis firstly starts from the development status and regulatory mechanism of the registration system in China.Taking into account the characteristics of pharmaceutical companies,the IPO audit risks of pharmaceutical companies under the registration system are analysed in detail at the level of material misstatement risk and inspection risk respectively.Then,this thesis selects the failed IPO of an R company on the STB as a case study to elaborate on the specific presentation of the above risks in the enterprise.The material misstatement risk is reflected in corporate governance risk,internal control risk,going concern risk,R&D expense risk,sales expense risk,capital management risk and inventory risk,while the inspection risk is mainly caused by the auditors’ lack of knowledge of the pharmaceutical industry,lack of professional judgment,inadequate quality control of the accounting firm and insufficient audit independence.Finally,this thesis proposes countermeasures against the above risks for the IPO audit risks of pharmaceutical companies under the registration system.In terms of material misstatement risk identification,auditors need to deepen their understanding of the internal and external environment of pharmaceutical companies through appropriate audit procedures in conjunction with the registration system reform,prudently assess the going concern capability of pharmaceutical companies and focus on the financial risks of key projects.In terms of checking risk control,auditors should maintain sufficient professional scepticism and improve their professional competence and ethical standards.In the context of the registration system accounting firms need to further improve the quality control system and actively use digital technology to assist audits.Improve audit efficiency and quality and reduce audit risk.In addition,at the level of the IPO audit environment under the registration system,the government can help firms to further improve their initiative and reduce their dependence on clients,thereby enhancing the independence of accounting firms.And there is a need to strengthen the supervision of information disclosure,increase penalties and improve the delisting mechanism to further improve the government regulatory system under the registration system.