Research On IPO Audit Risk Based On Fuzzy Analytic Hierarchy Process

IPO audit has always been a significant topic in the field of audit.With the transformation to the registration system,accounting firms,as the third-party intermediary agency,undertake the responsibility of substantive audit of enterprises.The new securities law also promotes the marketization of securities service institutions,clarifies the civil and criminal responsibilities of intermediaries,and audit failure may lead to the bankruptcy of auditors and firms.Under this background,reducing or controlling IPO audit risk,and increasing the quality of audit work has become important issues that auditors have to face.Modern Risk Oriented Audit Theory believes risk assessment is the first step of audit work.It is essential to identify and assess audit risks throughout the audit work.However,factors that influence audit risk involve many dimensions.It is often tough for auditors to comprehensively evaluate the risk,and is very based on subjective judgment,which is a huge hidden danger.Based on AHP-Fuzzy Comprehensive Evaluation Method,expert questionnaire method and case analysis,this paper lists major risks in IPO audit,in order to build a practical and usable IPO audit risk evaluation system for auditors.The evaluation system is of great help to the assessment of audit risk and the prevention mechanism in IPO audit work.And also it is effective to offer suggestions for regulatory agencies to carry out relative supervision activities,and to push intermediary agencies to enhance business capabilities.Firstly,based on the previous literature and the current audit policy,the audit risk model is further subdivided and expanded,innovatively introducing fraud risk,related party transaction risk,R & D expenditure confirmation risk and other indicators.With the help of AHP,we can not only evaluate risk of material misstatement and inspection,but focus on special risks of IPO.And that will make the evaluation of IPO audit risk more accurate,and prompts CPAs to pay attention to the areas with high risk.Secondly,the article uses AHP-Fuzzy Comprehensive Evaluation Method to establish an IPO audit risk evaluation system,and calculate weight of indexes by comparison of expert groups.This method to some extent satisfies the subjective randomness of the previous assessment methods.This paper uses the model of AHP-Fuzzy Comprehensive Evaluation Method,and draws the applicability and operability of this method.After that,this paper chooses Tianneng Technology to analyze reasons for its audit failure with a framework of the evaluation system.Then,the result of case analysis is compared with AHP-Fuzzy Evaluation to further confirm the usability of the evaluation system.Last,According to the risk evaluation system of IPO audit and the analysis of Tianneng technology,this paper draws the conclusion that CPAs should follow the principle of importance,focus on management fraud,custainability,internal control,and should improve the IPO audit competence,and then gives suggestions on risk prevention.