J Technology Company’s Goodwill Impairment Audit Risk Study

With the further development of market economy in our country and the arrival of the information age,the enterprise scale has developed rapidly,and its own industry has obtained a high proportion of the market,and the endogenous bottleneck period of growth has been arrived.It is normal for enterprises to break the bottleneck through merger and acquisition,but with the increasingly frequent merger and reorganization transactions,related problems and risks become increasingly prominent,such as inflated merger consideration,unreasonable performance commitment,gambling agreement and agreed premium are common phenomena,and inflated merger premium will lead to high goodwill recognized during merger,and eventually lead to large-scale goodwill impairment of listed companies.There have been frequent goodwill thunderstorms.From the perspective of audit units,this paper takes the audit risk of goodwill impairment of J Technology Company as the research object,and builds an audit risk assessment model.Firstly,this paper describes the current situation of goodwill impairment of domestic companies,combs domestic and foreign research literature,explains the significance of the audit risk prevention of goodwill impairment and expounds the theoretical methods used in this paper,which provides theoretical reference for the analysis in the following paper.Secondly,combined with J Technology Company’s operating environment,external environment,goodwill and goodwill impairment changes and annual audit report,the analysis is made,which will serve as the data basis for subsequent audit risk identification and cause analysis.Through the analysis of the above situation,the audit risks of goodwill impairment of J Technology Company are identified as follows: 1.The measurement difficulty of goodwill impairment is high;2.Skepticism of audit quality;3.The possibility of earnings motivation of management;4.Audit risks with high requirements for auditors’ professional competence.Reasons for audit risk of goodwill impairment of J Technology Company include: 1.Unclear valuation of merger consideration;2.Complexity of audit impairment test;3.Information disclosure of key audit matters is vague;4.Internal control defects and unclear responsibilities.In order to evaluate and prevent the audit risk of goodwill impairment of J Technology Company,based on the completion of audit risk identification and cause analysis,the audit risk assessment and prevention model is constructed.The audit risk index system is proposed from the two levels of serious and big statement risk and inspection risk,and applied to the audit risk analysis of goodwill impairment of J Technology Company.The scoring result is that the inspection risk is higher than the audit risk of material misstatement.Combined with the final model score and the weight ratio analysis of the model,the corresponding preventive measures are proposed,and the application verification is carried out.Finally,it puts forward the audit risk prevention measures from four aspects: the audit unit should strictly implement the audit procedure,always maintain a rigorous professional attitude,improve the quality of disclosure of key audit matters of goodwill,strengthen internal control and clarify responsibilities.Based on the case of J Technology Company,this paper hopes to apply fuzzy data model to analyze the causes and results of increased audit risk of goodwill impairment caused by premium merger and acquisition,and put forward corresponding suggestions based on research data results to help audit staff provide key points to pay attention to audit risks and maximize the utilization of audit resources within the project term.For the protection of our audit industry benign development will make some contributions.