Research On The Identification And Evaluation Of The Default Risk Of Listed Companies’ Bonds

In 2014,the Chinese government cancelled the rigid redemption of bonds.The state has introduced a deleveraging policy,and the financing policy has been tightened.The number and amount of defaults on bonds of listed companies increased significantly,and there was a climax of default.Among them,private enterprises accounted for More than 60%.Under such a trend that the number and amount of bond defaults by listed companies continues to increase,it indicates that there may be more listed companies that currently have bond default risks in the capital market.The bond default risk is a type of company’s business risk,which may cause errors in management’s identification.If the auditor fails to properly identify and evaluate the bond default risk of the listed company when auditing,it may cause the auditor to ignore the risk of material misstatement and make an inappropriate evaluation of the financial statements.Therefore,the CPA’s identification and evaluation of bond default risks is of great significance for improving audit quality and reducing audit risks.Before the occurrence of bond default,the accounting firm properly identified and assessed the risk of Kaidi Ecology’s bond default,and Kaidi Ecology is a private listed company,so Kaidi Ecology was selected as the case company for in-depth research.This paper adopts normative research and case research methods to conduct indepth analysis from the theoretical and practical parts.In the theoretical part,this paper sorts out relevant research on the influencing factors,identification and evaluation of bond default risk,and sorts out the relationship between bond default risk,material misstatement risk,and audit risk,and is the basis of the later bond default risk assessment model.The construction and case analysis provide a theoretical basis.In the practice part,first,in order to emphasize that CPA should pay more attention to the risk of bond defaults,it describes the trend of changes in the number and amount of bond defaults by listed companies.Then,select 40 financial and non-financial indicators,use factor analysis to construct a risk assessment model,and calculate the comprehensive score of factors to obtain the discriminant interval of bond default risk.Finally,taking Kaidi Ecology as an example,it analyzes the identification and assessment of bond default risks by certified public accountants.The audit idea is: to maintain professional suspicion of the default risk of bonds of the audited unit,use conventional risk assessment methods and risk assessment models to identify and evaluate the risk,analyze and evaluate the major misstatement risk that may be caused by the bond default risk,and finally deal with the risk.The expected contributions of this paper are:(1)Using factor analysis to construct a bond default risk assessment model,and propose a risk discrimination interval;(2)Emphasize the need for auditors to strengthen the identification and assessment of bond default risks.This paper analyzes and describes the identification and assessment of the default risk of Kaidi Ecology-Bond by certified public accountants,enriches related research,and provides inspiration and audit reference for other auditors to discover and evaluate the default risk of listed company bonds.The deficiencies of this paper are:(1)When using factor scores to divide risk intervals,the criteria for determining the level of risk are not in place,and there may be deficiencies in the determination of each interval;(2)This article only elaborates on the single case of identifying and assessing the default risk of Kaidi Ecology-bond,and there may be incomplete considerations in the risk assessment and risk response procedures.