Research On IPO Audit Risk And Response Of CPA

China's capital market set up late,but now the market have enormous scale,so attracting many companies to IPO.Although IPO has many advantages,the conditions of IPO are strict,resulting in many companies listed with financial fraud.These companies don't reach the expectation that they want to achieve before listing,so that investors lose confidence in the stock market.The chaos,in the IPO market,has brought CPA and the accounting firms involved,which have had a number of negative effects on the healthy development of the CPA industry.In this environment,this paper identifies the IPO audit risk,which mainly from the CPAs themselves,the audited entity and the external environment.CPAs can through the three aspects to identify the IPO audit risk,and then use the professional experience to assess the risk of material misstatement,then develop further audit programs to respond IPO audit risk.In the process of IPO audit,there are some problems such as CPAs lack of competence,entities lack of management structure,audit unit have complex transaction with related party and current laws lack of related system.CPAs should use risk-oriented audit model to deal with IPO audit risk,and develop further audit programs to meet the needs of IPO audit which can reduce the IPO audit failure occurred.Finally,using the case of Zhong Lei Certified Public Accountants' audit failure to analysis IPO audit risk.According to the specific case,CPAs can find out the mistakes in the audit process.CPAs should focus on the risk points in the IPO audit and the use audit programs by this case.Through the analysis of this paper,it can be concluded that the IPO audit risk is not caused by a single factor,but by a variety of factors,and the audit risk is inherent,universal,potential and controllability.CPAs should maintain their own independence and professional suspicion in the IPO audit process,and they should not blindly believe in the interpretation of the auditees.CPAs should understand the auditees and the environment in which they are located,and use analytical program to detect the abnormal risk of auditees.In addition,CPAs should maintain professional suspicion about the political intervention and other factors in the IPO audit process,and they can use the appropriate audit method to deal with the risk in which external environment may bring.In short,there are risks in the IPO audit,and CPAs have to identify these risks and use audit programs to deal with the risks,thereby reducing the probability of audit failure,so that the companies that have real strength can be listed to develop their own business.