Research On The Application Of Risk Oriented Audit

With the rapid development of our economy,on the one hand,the business risks of enterprises are increasingly complex,on the other hand,a variety of fraudulent behavior occurs frequently,which will not only lead to the failure of the audit,but also have a certain impact on the credibility of the audit,therefore,how to carry out audit work to deal with such risks is particularly important,and the previous traditional audit methods have been unable to meet the needs of audit development.In such an environment,modern risk-based auditing becomes an inevitable product of the development of the new audit environment and plays an important role in the auditing profession.By studying the literature on risk-based auditing and collecting information on Firm A’s audit of photovoltaic power generation company Y,as well as taking into account the long recovery period of state subsidies in the photovoltaic industry and the high risk of asset impairment and difficulty in taking inventory of power plants in remote areas,we analyse on this basis how Firm A applies the risk-based audit approach to audit photovoltaic companies,and how the application of this approach identifies,assesses,and The audit also examines how to identify,assess and address the risks of material misstatement.This paper is divided into six parts,with theoretical analysis followed by practical research.In Chapter 1,the background and significance of this paper are explained;in Chapter 2,the concepts and theories related to risk-based auditing are reviewed;in Chapter 3,the risk-based implementation framework of Firm A is outlined;In Chapter 4,Firm A’s risk-based audit approach is applied to the audit of Company Y.The entire process is discussed from the engagement stage-planning the audit work-identification and assessment of material misstatement risk-response to material misstatement risk-audit completion stage,and how Firm A applies the risk-based audit approach to the actual audit work is analyzed;Chapter 5 summarizes the problems in the process of applying risk-based audit to Company Y and analyzes the reasons for them;in Chapter 6,suggestions are made to improve the modern risk-based audit of Firm A,mainly in four aspects: strict standardization of risk assessment procedures,improvement of fixed assets monitoring procedures,evaluation of bad debt accrual for state subsidies receivable,and improvement of auditors’ professionalism.