Research On The Audit Risk Of Private Enterprise Bond Default

On March 5,2014,my country’s bond market experienced the first substantial default of publicly offered bonds("11 Chaori Bonds"),which ended the past history of rigid bond redemption and broke the market’s rigid expectations.The scale of bond defaults rose rapidly in the ensuing years.By 2021,the number of defaults will be as high as 150,and the default amount will rise to 160.393 billion yuan,bringing extremely high systemic risks.Judging from the default situation over the years,the number and amount of default by private enterprises are relatively high.Once a company defaults on its bonds,it will have a series of negative impacts on issuers,debt investors,accounting firms,and affiliated companies.Therefore,studying the audit risk of CPA before auditing private enterprise bond default can improve the quality of audit report and play the role of audit more effectively.This paper makes a descriptive analysis of the current default situation in my country’s bond market,and summarizes the main risk points of private enterprise bond defaults by consulting the Wind database,studying journal papers and analyzing research reports.Taking the risk point as a foothold,combined with the auditing standards and application guidelines of Chinese certified public accountants,the paper analyzes the private enterprise bond default audit risk.This paper selects typical cases,and conducts audit risk identification,assessment and response research on Yongtai Energy,a private enterprise with typical bond defaults in 2018.This article first introduces the default situation of Yongtai Energy’s bonds,and conducts a Z-value early warning analysis of the financial data of Yongtai Energy in the past years before the bond default.Then,through the various information and annual reports disclosed by Yongtai Energy,we identified and assessed the risk of material misstatement at the financial statement level and the identification level before Yongtai Energy’s bond default.The risk of material misstatement at the financial statement level includes material uncertainty of going concern,financing and debt repayment difficulties and internal control confusion;the risk of material misstatement at the recognition level includes invisible related party transactions and improper provision for impairment.Finally,it puts forward the CPA’s countermeasures to the major misstatement risk and inspection risk,hoping to provide reference for CPA’s auditing of private enterprises with default characteristics.