| Backdoor listing is a fast way for most enterprises with growth potential to go public.In the process of backdoor listing,both parties have market-oriented agreements.Among the complex agreements,performance commitment and compensation arrangements are important elements.In 2017,the Securities Regulatory Commission began to conduct a special inspection on the irregular behavior caused by performance commitment.Some listed companies’ financial fraud and fictitious profits emerged.Therefore,it is necessary to select practical cases from the perspective of auditors,systematically analyze the problems and failure reasons of auditors in the process of fulfilling performance commitments of listed companies backed by auditors,and put forward preventive countermeasures.In order to realize the performance promises made during the reorganization and listing and to increase business income and profits,Yabat was investigated by the SFC on April 6,2017.On July 5,Yabat was forced to withdraw from the stock market and imposed a maximum fine.Its auditor,Zhonghua Accounting Firm,was also investigated on suspicion of issuing false certificates.Yabat’s cross-border financial fraud is a typical case caused by the pressure of performance promises.False case.Based on the above realistic background,this paper takes the auditing of financial statements of Yabat Co.,Ltd.by Zhonghua Accounting Firm as an example,takes information asymmetry theory and risk-oriented auditing theory as the theoretical basis,studies the characteristics and causes of auditing risks faced by backdoor listed companies under performance commitment,and innovatively puts forward the transmission mechanism of auditing risks of backdoor listed companies under performance commitment.The case of Yabat,a representative manufacturing enterprise with a relatively new time and severe penalty,is selected to analyze from a comprehensive perspective.Finally,the paper puts forward some methods to reduce and avoid this kind of audit risk.The first chapter of this paper combs the research status of audit risk and performance commitment of backdoor listed companies,and finds that backdoor listed companies face greater financial fraud risk and sustained operation risk under performance commitment.The second chapter defines the concepts of performance commitment,backdoor listing and backdoor listing,and carries out information asymmetry theory and risk-oriented theory.Chapter three puts forward the transmission mechanism of this kind of audit risk and the characteristics of the risk and complexity of this kind of financial statements with sustained high returns,and comprehensively analyses the causes of audit risk from two angles of major misstatement risk and inspection risk.Chapter four first introduces the case of Abbott,and then analyses the audit of Abbott from two levels of major misstatement risk and inspection risk.The fifth chapter,based on the analysis of the above-mentioned theory and practical cases,draws a conclusion that the level of major misstatement risk of this kind of enterprise is higher than that of ordinary annual report audit company,and auditors are also facing higher inspection risk.We should fully understand the auditees and strengthen the allocation of audit resources to deal with the risk of fraud,internal control failure and Information Disclosure Violation at the level of material misstatement.The risk of inspection can be prevented by maintaining professional suspicion,strengthening internal communication among project teams,focusing on substantive analysis procedures,and doing a good job of comparative analysis of financial data before and after. |
