Research On Audit Risk Prevention Of Cultural And Media Corporation

In 2012,at the 18 th National Congress of the Communist Party of China General Secretary Xi Jinping clearly stated the importance of the development of cultural industry and its position in the national economic development.Strongly supported by relevant policies,the cultural media industry witnessed a rapid development.However,in order to expand their market share and gain a competitive edge,these companies were exposed to various questions.Then the researchers in the practice circle and academic circle began to study the audit risk of cultural media enterprises.Their problems disturb the regular order of the industry development and meanwhile lead to higher requirements of the audit quality in cultural media listed companies.In this thesis,the case method is adopted to analyze the factors affecting the audit risk of cultural media enterprises.As for the details,it makes an analysis of the audit risks in the specific case based on the relevant theories and industry background.Then,it also selects Huayi Brothers Media Corporation as an example to study the major misstatement risks faced by the auditors in the audit process.At last,some preventive suggestions are put forward in view of these risks that Da Hua Certified Public Accountants is faced with in the process of auditing Huayi Brothers Media Corporation.From the analysis of the factors affecting the material misstatement risk of cultural media enterprises,the findings are as follows.Firstly,the characteristics of cultural media listed companies make cultural products very sensitive to changes in regulatory policies,which is one of the reasons for the their unstable earnings.At the same time,these risks resulted from the changing policies have an important influence on the audit risk of accounting firms.And the time point and method of income recognition of cultural media enterprises are more complex than others,which makes the audit process more difficult for auditors in a way.In addition,Certified Public Accountants should also put more emphasis on the audit risks caused by the fluctuating income of companies.Besides,the common major misstatement risks of cultural media enterprises also include the calculation process and recognition of the goodwill impairment,large and excessive proportion of accounts receivable and impairment,inventory falling price reserves.Second,auditors are supposed to get familiar with many detection risks in the audit process of cultural media enterprises,such as the design and implementation of audit procedures,the control of business undertaking quality and so on.Finally,it puts forward the preventive measures against the audit risk of cultural media enterprises from these two parts: first,for the major misstatement risk of cultural media enterprises,more emphasis should be put on the revenue recognition risk,credit loss risk of accounts receivable,goodwill impairment risk,and the inventory falling price reserve risk.Apart from those,it should also focus on improving more reasonable and effective procedures associated with revenue recognition,goodwill impairment accounts receivable and bad debt reserves.Second,in view of the inspection risks faced by auditors,it is necessary to strengthen the business quality undertaken by the law firms,and optimize the audit procedures of cultural media company continuously.The creative ideas of this thesis can be summarized in the following aspects: the thinking pattern of modern risk-oriented auditing is applied to the auditing process of cultural media enterprises,with Huayi Brothers which is a representative of the cultural media industry as the entry point.The corporation has a single and fluctuating income,large amount of goodwill impairment,credit loss of accounts receivable,inventory price decline provision,etc.These problems are common in many cultural media enterprises.Thus,taking Huayi Brothers as the case research object and analyzing the possible audit risks,this thesis provides reference and suggestions for certified public accountants to audit cultural media enterprises.