Research On The Risk Assessment Of Zhentian Accounting Firm

It has been over 10 years since China introduced the modern risk-oriented audit at the beginning of 2007.The modern risk-oriented audit includes five stages: accepting business entrustment,planning audit activities,risk assessment(identifying and assessing the risk of material misstatement),risk response(dealing with the risk of material misstatement)and compiling audit reports.However,there are still many problems in the risk assessment of accounting firms,especially medium-sized and small accounting firms.Zhentian accounting firm,Located in Jiangsu,a medium-sized and small accounting firm,has been plagued by risk assessment.Therefore,it is urgent to analyze the shortcomings and difficulties in the risk assessment of Zhentian accounting firm,and put forward the corresponding solutions.The main body of this research is divided into three parts.First,based on the previous literature research,the important concepts and theories related to risk assessment are expounded.And through comparison,the fuzzy comprehensive evaluation method is selected as a quantitative risk assessment method for the risk of material misstatement.Second,from the core of risk assessment and manuscript,the current situation of the risk assessment in Zhentian accounting firm is preliminarily expounded.Moreover,with the help of questionnaire survey and individual interview,the present situation of the risk assessment in Zhentian accounting firm is thoroughly dissected,including the shortcomings of the process of identifying and assessing the risk of material misstatement.Furthermore,make a summary of the risk assessment in Zhentian accounting firm.Third,the corresponding measures are put forward for the lack of the risk assessment in Zhentian accounting firm,including the introduction of fuzzy comprehensive evaluation method,which realizes the quantitative evaluation of the risk of material misstatement.This paper uses the case of L Company to show the feasibility of the fuzzy comprehensive evaluation method.The main findings are listed as follows:(1)Zhentian accounting firm,a typical medium-sized and small accounting firm,doesn't pay enough attention to the risk assessment work and lacks a systematic understanding of the risk assessment,seriously violating the core of the modern risk-oriented audit,which is in urgent need to be normalized.(2)The medium-sized and small accounting firms,represented by Zhentian,which intend to improve the quality of the risk assessment,not only need to improve the comprehensive ability of Certified Public Accountants,but also need the AICPA's Guide,including building a sharing information database and improving Audit manuscripts.(3)The mature theoretical researches can support the development of the practice.The fuzzy comprehensive evaluation method has good applicability in the audit practice of Zhentian accounting firm,and the results of the risk of material misstatement are intuitive.