The Study On The Application Of Modern Risk-oriented Audit

The modern risk-oriented audit as a new auditing mode attracts the attentions of theprofession. In February,2006,our country issued a series of new audit risk rules, andstarted implementation in2007, marking the Certified Public Accountants’ audit hasentered the era of modern risk-oriented audit mode in the rules in our country. Theseauditing standards on the modern risk-oriented audit mode issued and implemented in ourcountry created conditions for the application of audit practice. Whether audit practice inour country has entered the era of modern risk-oriented audit is uncertain. Few scholarsstudy in our country. The research of this problem has important significance for us inunderstanding the implementation of modern risk-oriented audit in our country as well asthe making of audit specification. Therefore, this article chooses three audit clients in oneaccounting in our country, and chooses the actual audit work papers as investigation object.This article uses the archival method, interviews and field observation. The article mainlyfrom the preliminary business activities, risk assessment and risk response, main auditprocedures, the material and audit adjust analyzes the implementation of modernrisk-oriented audit, and finds main problems exited. Finally the article puts forward thefeasible policy to solve these problems.This article is divided into four chapters. The first chapter is the introduction; Thesecond chapter is theoretical basis and literature review, mainly introducing the theoreticalfoundation of the modern risk-oriented audit which includes Strategic management theory,system theory and the fraud motivation theory. And this part introduces the modernrisk-oriented audit research from domestic and foreign aspects; The third chapter choosesthree audit clients’ working papers as sample in a accounting firm to investigate theapplication of modern risk-oriented audit; The fourth chapter is this article’s conclusionpart, including the research fingdings, countermeasures and suggestions, study limitationsand future research direction.This article main conclusions include:1. The Certified Public Accountants’ preliminary business activities of the small andmedium-sized enterprises (SMES) often become a mere formality, lack of communication with the auditees.2. The Certified Public Accountants spends a lot of time in conducting the riskassessment but the effect is poor. The editing work papers often becomes a mere formalityespecially for small and medium-sized enterprises. In risk response, the Certified PublicAccountants do not value the use of control test, small and medium-sized enterprises(SMES) is hardly to control the test.3. The Certified Public Accountants have no good use in audit plan to arrange andguide the audit work. The making of audit plan is casual, and team members did not reallyinvolved in the audit planning and execution.4. The Certified Public Accountants usually require the auditees to adjust all themisstatement. If the auditees refuse to adjust, the Certified Public Accountants willconsider the following two situations:(1) If the misstatement amount or total misstatementamount is less than the material, the Certified Public Accountants are no longer require theauditees to adjust;(2) If the amount of misstatement is greater than the material or thenature of material is significant, the Certified Public Accountants consider issuing anon-standard audit opinions.5. The process of cash inventory, external confirmation is out of standard. In cashinventory, usually only audit assistant and cashier appear. External confirmation is carriedout by the auditees, the Certified public accountants lack of strict control.6. The Certified Public Accountants’ use of material: the auditees are divided intofor-profit entities, public companies, non-profit organizations, the new entity, mainly assetsentity according to the auditees’ risk characteristics by accounting firms. And according tothe classification, The Certified Public Accountants determine the material base andpercentage from experience. The firm usually chooses by50%to75%of financialstatements’ material as the actual material.