The Study On The Impact Of Economic Cycle On Audit Risk

The operation of the macroeconomy is always repeated,continually experiencing prosperity,recession,depression and recovery.At present,the main macroeconomic environment facing the audit is the fluctuation of the economic cycle.The research on the influencing factors of audit risk in the published literature mainly focuses on the micro level,which mainly studies the financial situation of the enterprises,the related transactions,Corporate governance,internal control effectiveness,income and expenditure and other specific microeconomic behavior on the audit risk,and not consider the audit risk will be affected by the macroeconomic cycle fluctuations in the macro environment,so this article introduces the macroeconomic cycle fluctuations Macro factors to study the impact of the audit risk,and no longer confined to the original micro-perspective.Economic indicators in many areas are affected by fluctuations in the macroeconomic cycle,resulting in changes in the same direction,which is called the expansion of the macroeconomic cycle.Auditing as one of the important economic activities,of course,will inevitably be affected by this expansion.This paper will focus on the research from the micro-indicators to the macroeconomic cycle-related indicators and audit activities linked to the above,the impact of the risk factors for the scope of a certain degree of expansion.Based on the background of the economic cycle,this paper studies the audit risk problem,and uses the econometric method to test the correlation and causality of the macroeconomic cycle and audit risk.On the basis of the above assumptions,this paper puts forward two hypotheses:1.Compared with the economic rise period,the economic decline period of the greater risk of material misstatement;2.Compared to the economic rise,the economic decline in the inspection risk higher;The empirical results of the two hypotheses are analyzed to obtain the correlation between the economic cycle and the audit risk.Based on the data of Shanghai and Shenzhen listed companies from 2007 to 2015,this paper constructs the corresponding audit risk model,and uses the least squares method to carry out multiple regression analysis to test the hypothesis and draw the final conclusion.Finally,it gives constructive comments on the innovation and limitations of this study and the further research on the future.This paper concludes that the audit risk is higher than the economic uptrend and the economic downturn is higher.This paper combines the economic cycle with the audit risk,which not only provides the microcosmic basis for the theoretical research of the existing economic cycle,but also provides a macro perspective for the theoretical research of audit risk.The empirical study provides a theoretical basis for us to more accurately understand the relationship between economic cycle and audit risk,so that we can more fully grasp the changes in audit risk and its impact mechanism in different macroeconomic cycle stages.Therefore,the research results of this paper are instructive for the future research of audit risk.