Study On Audit Risk Of The Sci-Tech Innovation Board Of Medical Device Enterprises

On june13,2019,in the expectation of countless people,the Sci-tech Innovation Board was officially listed.Since the opening of the Sci-tech Innovation Board,the number of successful IPOs of the Sci-tech Innovation Board has reached 398 by mid March 2022.The development of sci-tech innovation companies in the registration system reform of Sci-tech Innovation Board is relatively backward,and the requirements for the company’s information disclosure are also high.This is very important for the healthy and stable development of Sci-tech Innovation Board for the company’s accounting firms to reduce the IPO audit risk,ensure the audit quality,and ensure the true and fair disclosure of financial reports,so as to enable investors in the capital market to make more reasonable investment choices.As there are obvious differences in systems and rules between the Sci-tech Innovation Board and other sectors,the auditors of accounting firms do not know much about it,so it is particularly necessary to focus on its research.The medical device industry is the industry that the Sci-tech Innovation Board focuses on.Especially in recent years,with the deepening of the epidemic,the government has given more and more support to the pharmaceutical industry,and people have paid more and more attention to this topic.Due to the particularity of the Sci-tech Innovation Board medical device enterprises,they are prone to financial fraud due to their high R & D costs,large profit fluctuations and complex business models.In addition,there are few studies on the IPO audit risk of the Sci-tech Innovation Board,and there is no in-depth research on the medical device industry supported by the Sci-tech Innovation Board.Therefore,we choose to analyze the IPO audit risk of the Sci-tech Innovation Board of medical device enterprises.Based on the in-depth study of a series of rules of the Sci-tech Innovation Board and the listing status of IPO companies,this paper analyzes the current situation of IPO audit risk of the Sci-tech Innovation Board of medical device enterprises by using modern risk audit oriented theory,principal-agent theory,fraud triangle theory and other theories,and analyzes the policy rules,the characteristics of the medical device industry,the characteristics of sci-tech innovation companies in the medical device industry,and the auditors themselves.According to the situation of the IPO company of the Sci-tech Innovation Board,the author chose Suzhou LINHWA MEDICAL,which failed to pass the three listings in 2021,because of its own operational and audit risks.Therefore,this paper chooses Suzhou LINHWA MEDICAL as the case study object.Through the case analysis,the problems we hope to solve are:(1)The overall audit risk of the IPO of the Sci-tech Innovation Board of medical device enterprises.(2)By analyzing the key audit items,inquiry contents,prospectus and other document data in Suzhou LINHWA MEDICAL audit report,this paper analyzes the audit risks of the company from the perspectives of financial report level,recognition level,inspection risk and so on.(3)For the audit risk of medical device enterprises’ IPO on the Sci-tech Innovation Board,the preventive measures that certified public accountants should take.The conclusion of this paper is that the current audit risks of Sci-tech Innovation Board of medical device enterprises mainly focus on revenue recognition,distribution mode,goodwill impairment,R&D expenses and corporate governance.The reasons are the industry operation characteristics of the medical device enterprise,the overall development stage of the company and the key audit matters described by the certified public accountant in the audit report.In order to deal with the above audit risks,this paper suggests that certified public accountants should strengthen their understanding of the medical device industry and the auditee;Strengthen the audit of key risk items such as internal control,revenue recognition,R&D expenses and goodwill impairment;Improve the professional ethics of certified public accountants.