A Study On Audit Risk Of Backdoor Listing In China's Capital Market

Backdoor listing,as a supplement to IPO,is favored by many enterprises eager to enter the capital market due to its advantages of fast audit speed and high success rate.In 2018,the CSRC shortened the isolation period for backdoor trading after the initial public offering failed.At the end of the year,the Exchange also said it would encourage high-quality asset restructuring.The backdoor trading market is expected to see another boom.However,under the circumstance of stricter backdoor supervision,there are still enterprises taking risks,which means that China's accounting firms face greater risks in backdoor listing audit.The phenomenon of backdoor chaos not only disturbs the capital market and is far from the original intention of rational allocation of resources,but also increases the business risks of accounting firms,bringing adverse effects on the reputation of the CPA industry.How to identify and deal with audit risks and avoid audit failures in backdoor listing audit has become the focus of accounting firms and certified public accountants.Firstly,this paper sorts out the domestic and foreign literatures on audit risks,backdoor listing and risks.Secondly,through the characteristics of backdoor trading in our country,the feedback opinions of the CSRC on the company to be backdoor,and the inquiries of the exchange on the company to be backdoor,the current situation of backdoor trading in our country is summarized.On this basis,the causes of backdoor audit risks are further analyzed from objective,subjective and external environment.Then,Nine Top cases that have been punished by the CSRC are selected for case analysis to find out the deficiencies in auditing risk control of REANDA accounting firm: rashness in undertaking business,insufficient understanding of the audited entity and its environment,failure to implement effective auditing procedures,and lax quality control.Finally,the paper puts forward countermeasures to control the risks of backdoor listing auditing from three aspects: CPA,accounting firm itself and auditing environment: in the face of high-risk backdoor auditing business,CPA should hold professional skepticism and improve professional quality;Accounting firms should strengthen quality control management and team building.The audit environment should start from two aspects: establishing a good competitive environment,strengthening the construction of laws and regulations and supervision system.