Research On The Audit Risk Of Analytical Procedure In Independent Audit

Presently, Modern Risk-Oriented Audit mode adapts to the increasing demand of audit risk in era of knowledge economy and information society, and it is the inevitable trend of audit mode. The chief feature of Modern Risk-Oriented Audit is the vigorously promotion of the using of analytical procedure which has become basic method and most important procedure of it. February 15, 2006, China's Ministry of Finance issued 48 CPA practical guidelines, and its prominent feature is the comprehensive implementation of Modern Risk-Oriented Audit thinking, besides, it has fully affirmed the irreplaceable application status of analytical procedure. The article is precisely under such background to propose"the audit risk of analytical procedure"for the first time, and discusses the audit risk because of the using of analytical procedure in independent audit.The essay mostly adopted the methods of combining the induction and deduction, the qualitative and quantitative, and started discussion on the basis of research results at present, firmly regarding as the audit risk of analytical procedure and on the progressive layers. Firstly, the part of theoretical basis introduced the concept and characteristics, application and development process of analytical procedure, described the use of it in the audit practice, and defined the content of the audit risk of analytical procedure. Secondly, the essay clearly explained factors of the audit risk for analytical procedure, including main factors of CPA, environmental factors and specific project factors. Thirdly, the article constructed the evaluation model of audit risk for factors using the AHP method, and realized the evaluation about the relative importance of the factors. At last, it put forward suggestions to avoid the audit risk of analytical procedure in the Modern Risk-Oriented Audit mode according to the evaluation results. With the continued implementation of China's CPA practical guidelines from January 1, 2007, the using importance of analytical procedure is unquestionable in independent audit. The evaluation model of factors for analytical procedure can make a scientific evaluation to the relative importance of factors, thus we can design countermeasures with a clear goal to avoid the risk of analytical procedure, which ensures that the implementation of analytical procedure for CPA may obtain high-quality audit results, and points out the direction to independent audit under the macro-environment of China's Modern Risk-Oriented Audit.