Research On Modern Risk-Oriented Auditing And Application

Audit model is the most important issue in the theory and practice of auditing. There are three kinds of models during the development of auditing, i.e. the accounting number-based auditing, the system-based auditing and the risk-based auditing. The risk-based auditing is a risk assessment model that generates in the practice of auditing, in order to adapt to modern society's high risk. The risk-based auditing is a kind of model that based on the accounting number-based auditing and the system-based auditing. As a modern auditing, the risk-based audit has the responsibility to bridge the expectation gap, to reduce occupational the risks of auditing. The risk-based auditing represents the developing trends of modern audit, the auditing has a far-reaching impact on the theory and practice of auditing. Though this is a new audit model, at present there is a serious shortage of its use. Most accounting firms remain in the traditional audit model. Some of the firms use the accounting number-based auditing, the auditor audit mainly on the specific details of the closing balances or transactions tested, they often audit based on the original document-start accounting. They start with tracking to the formation of accounting documents and books, accounting statements and other accounting documents, checking the company's relationship between the accounts, payment card and the accounts table, attempting to find problems by examining documents and the turnover of the accounting system. Other firms use the system-based auditing, the auditor focus on the internal control system to control all aspects of the review, aiming to identify the weaknesses of internal control,the root of the problem, and then to expand the scope of the inspection. Of course, there are still a few firms use the risk-based auditing, but only choose the control-risk-based auditing, a kind of model based on the system- based auditing.This article is based on the recent study results inside and outside China, and focuses on risk-based auditing. This article is divided into four parts.First, Review of study inside and outside of China. There are several articles listed in this part, and they analyzed the risk-based auditing from different aspects. They also pointed out the disadvantages of the risk-based auditing.Second, Theories about the risk based auditing. The author first introduced the definition of audit risk and then explained the contents of components of audit risk, and they are control risk, inherent risk, detection risk.Third, the application of risk-based auditing. The author first introduced the process of risk-based auditing, and point out that the risk-based auditing also has three stages—planning stage, implementing stage, and reporting stage. Unlike other auditing, the special characteristic of risk-based auditing lies on how to affirm detection risk in the planning stage. Forth, the application of risk based auditing in China. Using the survey to demonstrate the necessity of risk based auditing, Then, the author explained the situation of construction of risk based auditing standards in China. The standards regulates the process of risk based auditing, the work paper of risk based auditing, and so on.