The Research On Method Of Modern Risk-oriented Auditing

In 21st century, with the rapid change of the global economy, the connection between business and external environment has been enhanced. The limitation of conventional risk-oriented audit with the character of internalization and reductionist is obvious gradually. Meanwhile, endless financial statements fraud cases bring great pressure to audit profession. Therefore,it is urget for auditors to seek new auditing technologies. Some large international auditing firms allied with acedemic authorities develop some modern risk-oriented audit approaches. International Auditing and Assurance Standards Board, the Auditing and Assurance Standards Board of American, Britain, Canada, and other countries are also starting to research and issue new audit risk standard to promote the change of risk-oriented audit.Modern risk-oriented audit has caused great concerns by international audit communist. In order to be consistent with international auditing standard, on February 15, 2006, China Ministry of Finance promulgated"China Registered Accountants Auditing Standards No.1121-Understand of audited entity and its environment, also evaluated the risk material misstatement","China Registered Accountants Auditing Standards No.1231-Implementation of the procedures for assessed risks of material misstatement","China Registered Accountants Auditing Standards No.1141-Considerations of fraud in auditing financial statement"and a series of new audit risk standards. We can see that modern risk-oriented audit has been a key issue in audit profession. Based on this background, this paper systematically studies modern risk-oriented audit approaches basis of latest research result from aboard and put forward some valuable comments.There are five parts in this paper and the structure and content are as follows:First part, introduction. Mainly discuss the research background, significance, status, ideas and methods.Second part, fundamental theories of risk-oriented audit. Firstly, introduce the fundamental theories of risk-oriented audit, including risk management theory, strategic management theory and system theory. Secondly, it analyzes the content of modern risk-oriented audit and two related basic concepts: the significance of auditing and audit risk. Finally, describe the characteristics of auditing risk model and modern risk-oriented auditing.Third part, risk identification, risk assessment and risk response methods in modern risk-oriented audit. Firstly, using the concept of risk identification, risk factor analysis and risk identification method to analyze the risk identification. Secondly, it discusses risk assessment which is the core content of this part. Then, introduce risk index system and the methods of auditing risk assessment, and on this basis, design a a comprehensive evaluate audit risk method combined with Delphi Method, Analytic Hierarchy Process, and comprehensive fuzzy judgment method. Finally, propose the response methods to risk of material misstatement of financial statements.Fourth part, case study-Wuhan Iron and Steel Company. Discuss the risk identification, assessment, and response methods of modern risk-oriented auditing through case study.Final part, conclusion and expectation. It includes summary studies and prospect for the further related studies.