Research, Risk-based Audit Approach And Its Application In China

Modern risk-oriented Auditing approach, as an important auditing concept and mode, has been a focus in the field of audit and accounting. In the 1990s, some foreign experts improved the conventional risk-based auditing approach and then overcame some defeats, especially the change about the conventional auditing risk model. As it is, Modern risk-oriented Auditing approach is a great innovation of auditing technology in systematic theory and strategic management theory. Of course, it represents the latest trend in the modern auditing approach. ISSAB issued three new international standards on auditing risk and the standards were implemented in Dec, 2004. Accordingly, CICPA solicits opinions in the whole country about the standards on auditing risk which revised in Oct, 2004 and will issue in 2005 formally. What they did firmed the position and effect of Modern risk-oriented Auditing approach.In the first part of the article, the author begins with the basic theory of modern risk-oriented Auditing approach. And then focus on the change of the model .In the third part, analyzes the feasibility which apply the approach in china from two aspects. In the author's opinion, modern risk-oriented Auditing approach is an inevitable choice to us. What's more, it is the objective request that adapts the change of the auditing circumstances and harmonizes the auditing standards. But how to implement it effectively will be an important problem in view of existing situation. In the fourth part, the author puts forward the concrete procedure and in the last part, discusses propose on how to implement it at present. First, improve the system of independent auditing positively. Second, accumulate the knowledge to accomplish the industry specializations. The last but not the least, strengthen the auditing morality construction to avoid the moral risk.