Research On Audit Risks Of Pharmaceutical Manufacturing Enterprise

In recent years,while the material level is improving,the public is more and more concerned about health issues,the state is also gradually increasing the resources invested in the pharmaceutical industry,the pace of progress is accelerating.Yet,there have been numerous instances of financial fraud in pharmaceutical corporations in recent years,most of which are of huge amounts and serious,and the audit risk of accounting firms in the process of auditing pharmaceutical companies has become increasingly high.Most scholars do not pay extra attention to industry differences when conducting research on audit risk in order to better apply to all industries.In the case of pharmaceutical manufacturing companies,for example,they have industry-specific characteristics such as being subject to strict policy regulation and high industry risk,which are significantly different from traditional manufacturing industries.Therefore,during the audit process,auditors need to adjust their audit strategies according to the characteristics and risks corresponding to pharmaceutical manufacturing companies,rather than applying one set of audit procedures to all companies in the industry.Based on this,this paper selects the audit of Asia Pacific Pharmaceuticals by Tianjian & Partners,which was identified as one of the 20 typical violations of the Securities and Futures Commission in 2021,as an example to analyse the audit risk of pharmaceutical manufacturing companies based on the audit risk model and propose corresponding countermeasures.Firstly,this paper compares and summarises the existing literature on audit risk and audit risk in pharmaceutical companies.Secondly,we analyse the development of pharmaceutical manufacturing enterprises and the current situation of audit risk in China,and briefly describe the case of APAC Pharmaceuticals.Finally,we analyse the audit risk of APAC Pharmaceuticals from two levels,namely material misstatement risk and inspection risk,and propose targeted preventive measures in light of its financial data and specific circumstances.This paper found through our research that(1)pharmaceutical manufacturing enterprises in China have accounted for a relatively large number of non-compliant enterprises in recent years and are an area that we need to focus on;(2)the external environment of the business,corporate governance,internal controls,the veracity of revenue,and accounts receivable are where the audit risks of APM are most evident.,as well as the auditors’ failure to maintain professional skepticism,the inadequate implementation of some audit procedures and the failure to conduct good quality control.(3)while performing audits of pharmaceutical manufacturing enterprises,the audit risk should be managed by improving the identification of material misstatement risks and lowering inspection risks.