Study On St Company’s Audit Risk And Prevention Under Delisting Pressure

The report points out that we should implement the new development concept,build a new development pattern,and promote sustainable high-quality economic development,and an important basic force to achieve this goal is the continued dynamic and healthy development of the capital market.For a long period of time,the delisting system has functioned only on the single indicator of net profit,resulting in the existence of many poor quality shell companies in the capital market,hindering the healthy development of the market by virtue of the scarce "shell resources".Since 2006,the domestic delisting system has undergone five major reforms and optimizations,and the delisting system has been effective.Translated with www.Deep L.com/Translator(free version)The latest revision of delisting system,drawing on the relevant experience of the GEM and Science and Innovation Board on delisting system design in the early stage,has helped simplify delisting process,strengthen risk warning,optimize delisting standards,etc.,and accelerated the implementation process of normalizing,marketization and legalization of domestic delisting system.~*ST Zhongchang has been on the verge of delisting twice under the pressure of constant reform of the delisting system.In order to replace the main business of the shell,the real controller was banned from the market,the former chairman was placed on criminal case,and later encountered a debt crisis.Since the audit of the subsidiary was out of control in 2019,it has been issued non-standard opinions for three consecutive years and frequently changed the accounting firm.With the diversification of delisting indicators,more strict delisting standards,ST listed companies in order to avoid delisting means are more secret,accounting firms audit the audit risk is also increasing.Based on modern risk-oriented audit theory and risk management theory,this paper uses ~*ST Zhongchang as a specific case to analyze the audit risk and its prevention of annual reports of ST listed companies under the pressure of delisting.First of all,the motivation of ST listed companies to avoid delisting under delisting pressure is analyzed,and then the measures they may take to avoid delisting are analyzed,in order to find out which audit areas ST companies have higher risks.Secondly,the specific case of ~*ST Zhongchang is analyzed and introduced,including the audit situation of ~*ST Zhongchang’s annual report in recent years and the regulatory penalty it has been subjected to,as well as the impact on the two firms and their certified public accountants who provide authentication services for its financial statements audit and internal control audit in 2019 and 2020.Thirdly,the causes of audit risks of ~*ST Zhongchang are analyzed.Material misstatement risks at the level of financial statements include external environment,industry risk,delisting risk,internal control risk,risk of significant uncertainty of continuous operation and debt default risk.The risk of material misstatement at the identification level includes the risk of operating revenue authenticity and receivables recoverability,related party transactions,monetary funds,overvaluation of goodwill and other non-current financial assets,while the risk of inspection includes the risk of inadequate assessment of first undertaking business,inadequate execution of audit procedures,limited audit scope,insufficient business ability of auditors and lack of attention to special matters.Finally,the ST class listed company annual report inspection risk prevention put forward some countermeasures:one is before and after the CPA need to strengthen communication,two is to do a good job of risk assessment,the development of targeted audit program,three is to optimize the audit process,improve the quality of audit,four is to strengthen the firm business quality management and project review,five is to enhance the attention to special matters.The innovation of this paper is that the new delisting regulations have increased the pressure of delisting ST-type listed companies,and there are few studies on audit risk and no systematic case study analysis.This paper identifies,summarizes and concludes the commonly used means to avoid delisting of ST listed companies,and draws the key audit areas of ST companies accordingly.It can help firms and CPAs to quickly and accurately identify and assess audit risks in the audit process,scientifically utilize and allocate limited audit resources,and maintain a high degree of caution and efficient audit work,providing a reference for auditors to effectively address audit risks and improve audit quality of ST companies.