Audit Process Designing And Application Of Structured Finance Product

Structured financial products is a kind of financial products which embed financial derivatives in fixed income securities or structured deposits.It is not only an important manifestation of financial market innovation,but also an integral part of a complete financial market system.Compared with the traditional financial products,structured financial products have the characteristics of higher yields.Structured financial products have maintained a high growth rate since the financial products were introduced into domestic market.Ithasacertain degree of difficulty forstructured financial products todesign the audit process.Thereasons are as follows.First,time for structured financial products to be introduced into domestic market is short.Second,as a class of embedded derivatives,structured financial products has deeper level of innovation and higher innovation frequency.After observing and analyzing of the audit work of structured financial products,it is found that there is no relevant criterion for the audit practice of embedded derivative instruments such as structured financial products in the current audit standard.The current auditing procedures exposed two major defects whichinclude the lack of information disclosure audit and the fair value of the audit procedures.Therefore,the research on the auditing procedures design of structured financial products has certain research significance.Based on the modern risk‐oriented audit theory,this paper designs the audit process of structured financial products through the application of audit model and the guidance on the auditing standards of derivative instruments and fair value.In addition to focusing on internal control and business compliance and other regular key audit content,the newly designed auditing procedures also focusing on information disclosure and fair value and other audit content which different from the conventional financial products auditing.This paper discusses the analysis of fair value measurement by selecting three structured financial products as cases,because fair value auditing is the key and difficult point in the auditing practice of structured financial products.First,this article highlights the development of structured financial products in recent years by the collation of literature and data collection.Then this paper puts forward the view that the study of structured financial product audit has academic and practical significance.Second,this paper describes the definition of structured financial products,domestic and international development,domestic accounting standards for such products accounting treatment requirements.This article analyzes the possible risks with product characteristics.And then it can lay the foundations for the later audit design Third,this paper elaborates the theoretical essence of modern risk‐oriented audit.And the article analyzes the current situation of structured financial products audit.,and do research about audit process design by combining with the theory and the status quo.This article studied the focus and difficulty in the audit process which is fair value measurement audit by the way of case analysis.Finally,after summarizing the whole paper,the writer draw conclusions and point out the possible shortcomings and prospects.The article concludes and concludes that the structured financial product audit should pay attention to the information disclosure audit and design the standard fair value measurement method.But with the acceleration of financial product innovation,the audit process deserves to continue to explore and research.