Audit Risk Prevention In IPO Financial Fraud

According to the China IPO market research report disclosed by Ernst & Young Accounting Firm: In the first half of 2018,China's A-share market raised nearly 1.5 billion yuan.Due to the characteristics of China's current financial system,most enterprises still face bottlenecks in the development of limited financing channels and severely lack of funds.More and more companies are seeking to expand financing channels through listing,and the IPO market is the focus of investors and the public.At present,in China,companies want to go public,in addition to IPO,there is a reorganization listed.According to the "Questions and Answers on the Decision of Amending the Relevant Provisions on Major Asset Restructuring and Supporting Financing of Listed Companies" by the CSRC,the listing standard of the backdoor reorganization is in line with the IPO.However,in recent years,listed companies in China have frequently experienced accounting fraud and financial fraud,and the fraud cases of listed companies have many characteristics of fraud,long duration,hidden means,and huge amount of fraud,which seriously harms China's capital market.According to the data disclosed by the CSRC: As of March 15,in 2018,the China Securities Regulatory Commission requested the suspension of the review of 19 companies to be listed,and another 48 companies were facing a termination review.For companies that intend to raise funds through listing,in the face of the current system of trials,the company needs to provide financial reports audited by accounting firms with corresponding business qualifications for nearly three years.Therefore,auditing has become an important part of the IPO market.The failure of IPO audit will not only seriously affect the development of China's auditing industry,but also seriously damage the interests of Chinese investors and the development of capital markets.In 2017,Jiuhao Group's "flickering" restructuring incident shocked the entire securities market.The CSRC's adopting a fine punishment expressed its current strict attitude towards fraudulent practices.The fraudulent subject Jiuhao Group was due to its special fraud field.Counterfeiting has caused concern and reflection in the industry.This paper takes case analysis as the research method,and analyzes the audit case of the IPO of Jiuhao Group by Reanda Certified Public Accountants,analyzes the causes of fraud under the guidance of financial fraud and audit related theories,so as to reduce the financial fraud and auditor's negligence.IPO audit risk.First,it analyzes the penalties of Jiuhao Group and Lianda Office and the Securities Regulatory Commission,and introduces the background of the case.Secondly,combined with the three-year audit report and relevant information of Jiuhao Group,the means of fraudulent listing were analyzed,mainly including fictitious income and bank deposits.Furthermore,the causes of the fraud were analyzed from the Jiuhao Group and the external environment.Finally,the focus is on the reasons for the failure of the audit from the perspective of Lianda.On the basis of case analysis,it points out the inspirations from the audited units,CPAs,accounting firms themselves and government regulators in the case of the audit failure of the listing of Jiuhao Group: First,the audited entity should be sound Internal control and governance structure,improve core competitiveness,expand financing channels,and ease financing pressure;Second,the firm should establish an IPO project risk assessment mechanism to control the overall risk of the IPO project of the audited entity,improve the quality control system,and improve The quality of the team of the IPO audit project team;third,the CPA should maintain professional suspicion,pay attention to the ability of the audited entity to continue to operate,and strengthen the audit of important subjects such as income,assets,profits,and costs of IPO enterprises.Fourth,the regulatory body should Increase penalties,improve the listing environment,improve the disclosure system,and rationally use the media to improve the IPO listing environment.