The Research On Risk Assessment And Prevention Of Annual Report Audit Of Hunan Salt Co.,Ltd.

In recent years,the reform of salt industry system has broken the monopoly situation of local salt enterprises,intensified the competition of salt enterprises,Most salt enterprises are wholly state-owned or state-owned holding.The performance of enterprises is directly related to the interests of the management,and even some management manipulate the financial statements in order to disguise their own interest transmission behavior.At the same time,more and more salt making enterprises are reforming and listing for development,which has potential financial fraud motivation.This means that the certified public accountants who audit the annual report of salt enterprises will face increasing audit risks.This paper attempts to study the audit risk assessment and prevention of annual report audit of Hunan salt industry Co.,Ltd.in 2017.On this basis,it identifies and evaluates the major misstatement risk and inspection risk of annual report audit of Hunan salt industry,learning from the audit procedures adopted by Baker Tilly International Limited,and drawing on its experience,then puts forward preventive suggestions for the proposed risks,so as to provide ideas for the firms to audit the annual report of salt enterprises.This paper takes the annual report audit of Hunan salt industry as a case study.First of all,the basic concepts and related theoretical basis are combed.Then it introduces the characteristics of Hunan salt industry and its impact on risk,as well as the basic process of risk assessment of Baker Tilly international audit.Based on the case study,the audit risks in the process of annual report audit are analyzed,that is,the risk of material misstatement and the risk of inspection.Major misstatement risks mainly include: the risk of major misstatement that may be caused by revenue recognition,less cost,less provision for bad debts of accounts receivable,less sales expenses and management expenses.Inspection risks mainly include: audit risks caused by defects in the design and implementation of audit procedures and the application of information technology.Finally,the paper puts forward some preventive suggestions for these audit risks.The purpose of this paper is to further analyze the audit risk of annual report of Hunan salt industry,improve the ability of certified public accountants to identify the major misstatement risk and inspection risk of salt enterprises,and hope to provide reference for the firms to undertake the annual report business of salt industry in the future.