An Study To Improve The Pre-IPO Company Audit Pass Rate

The rapid development of the capital market is playing an increasingly important role in financing, resource allocation, etc. However, due to the high listing threshold and rigorous audition of our IPO system, these prevent the realization of resource allocation and are not conductive to the achievement of the financing. There are still many outstanding enterprises missed the opportunity of listing and the occasion of rapid developing because of various reasons. This paper focus on the reasons why IPO is denied, analyzing the key points that audit regulator concerns combined with case study, aiming to provide reference for Pre-IPOs.This paper first gives a brief introduction to the evolution of our IPO audit system, which focuses on analyzing the background, advantage and disadvantage of approval system and substantive regulation philosophy, compared with registration in western, and clear the future direction of China’s review system. Then it introduces the company listing process and requirements under the restriction of substantive regulation philosophy, and analyzing the China’s overall enterprises IPO audition situation in recent years and the influence of macro environment for listing company. After analyzing the reasons why IPO is denied, this paper asks enterprises to depart from their own reasons, summarizes the key points that audit regulator concerns according to the case study which focus on restructuring, governance, equity, financial affairs, sustained profitability, independence and the use of funds raised. Thus this paper makes reference to normative operations of Pre-IPO before they make declaration and substantive review of the enterprises which are under declaration, aiming to improve the audit pass rate for the Pre-IPOs.