Research On Risk Assessment Of Financial Statements Level

Auditing is the important means of the shareholders and the government`s supervision tothe company. In theory, the now stage of audit development is risk oriented stage, to preventand control material misstatement risk for purpose.From the practice of speaking, audit isdivided into two parts, financial statements level audit and identified level audit. The essenceof financial statements level audit is misstatement risk evaluation and answer in this level. Sonormalizing risk assessment of financial statements level is significant for the success orfailure of the audit.Risk assessment of financial statements level has been widely applied overseas.Especially in the "big four",it has been used in a standardized way. In large enterprises andinstitutions, it plays an effective role. In a secret, the standard way hasn’t been widely spreadand used. But to be sure, risk assessment of financial statements level in audit is effective. Athome, the audit is under study and discussion. So audit demand under development offers aspace for audit research from theory to practice.After risk-oriented audit being introduced into the audit mode, risk of financialstatements is increasingly underappreciated. In practice, risk assessment of financialstatements mainly depends on the auditors`professional judgment. On a short view,professional judgment pattern won’t change, therefore scientific method promotion of riskassessment and improvement the efficiency of professional judgment are very meaningful.This article does research from the angle of constructing evaluation way of riskassessment. In theoretical part, theory of internal control, strategy and risk oriented audit isput into the risk assessment. Several index enjoys classification of financial statementsrisk.The index selection is based on the application of theory in the audit,including internalcontrol theory, the strategic theory and risk based auditing theory. In practical part, with someprojects of evaluation index enjoy the description, it makes its visualization and easyoperation. After that,we introduce mathematical model. First half of model introduced naturalendowments principle of index project.It is shown from the third level to the second level andto the third level last.Score is collected from the bottom to the head.The second half expressesthe usage method of natural endowments, namely "progressive" and "wrong" typecombined.Next, assign points for subprojects according to the demand of riskassessment.Then get all index score of subproject. Again according to the operation rules ofthe mathematical model, gather the score of subject. The gathering result is the upper level`s score.And so forth,we can get the score of all the subjects.At last,according to the scoreof projects,we can get the importance of the projects.The sequence is the result which wewant.After all of that,one example will be introduced.And we can get risk assessment result.Finally, proposed the risk assessment of the way improvements.