Empirical Research On The Relationship Between Corporate Governance And Risk Of Material Misstatement

Since 2001, the occurrence of financial statement fraud company continuously, which forced the theory start thinking about fraud, gradually to the efficiency problem of the research of corporate governance as the breakthrough point and focus; corresponding auditing profession also will continue to review the existing audit mode type defects and problems in, and try to change existing audit models and overcome the defects. In the continuous process of exploration, first introduced the concept of the risk of material misstatement and apply it to the audit model, and provides the beginning and the objective of the audit work is of material misstatement risk for evaluation and estimation. So, this article listed on China’s development status and risk assessment of performance basis, along the company governance as the main line, effect of study of corporate governance characteristics of audit risk of material misstatement between them and their correlation.Considering the many elements of corporate governance characteristics, special background and its on the risks of material misstatement of the influence degree of correlation by representative indexes and the authenticity of data, and draw lessons from the existing research results and the relevant information, selection of ownership structure, the board of directors will feature and the characteristics of the board of supervisors of several elements, to understand the link between corporate governance and risk assessment.The governance structure of listed companies is influenced by the unique background of China’s economic development is heavily influenced, because of the structure of China’s economic development is not mature, resulting in corporate governance structure, there are many problems, in addition to corporate ownership structure is complex, and state-owned enterprises advantage obviously, and the board of directors management system is not perfect and the poor coordination of operational mechanism and other issues, the role of the audit committee is very limited. The main reason is that our country supervisors will be inefficient supervision, which leads to the capital structure of China’s listed companies face greater risk, but also in a certain extent, increased the enterprise management fraud risk, which has brought great pressure to the listed company risk assessment.This paper mainly makes specific research on the listed company audit risk and alternative variables, for the enterprise risk assessment provides an important reference, the proportion of tradable shares, the shareholding ratio of the first largest shareholder, as well as the board of choice and independent director proportion, the board functions and profitability of the business can affect the speed of enterprise development, this paper selects the profitability of the business as well as the board of the three control variables of meeting ratio, financial risk, based on building regression model to carry out an empirical test. Through the empirical test results show that the above indexes are caused by enterprise audit risk increase in different degrees, through empirical analysis to find the hypothesis and reasons of inconsistent production index. Finally, put forward to perfect the corporate governance characteristics from improving the corporate governance structure, strengthen the CPA audit work, establish the risk oriented audit idea and so on, to avoid the audit risk of material misstatement.