Problems And Solutions In The Application Of Analytical Audit Procedures

With the continuous development of the economy,there are many opportunities for the development of enterprises.The scale of enterprises is also expanding,and it is no longer limited to a single business.The complexity of business will inevitably lead to the difficulty in identifying financial risks,which puts forward higher requirements for the audit of certified public accountants.At present,the analytical procedure has been widely used in all stages of the audit work,but its application in the audit practice is not very standardized,and there is a phenomenon of formalization,mechanization and institutionalization.This paper takes Blue Mountain Technology as a case to analyze the annual report and audit report of Blue Mountain Technology from 2017 to 2019.Through studying the failure of ZTE Caiguanghua’s audit of Blue Mountain Technology,it is found that the main problems of auditors in applying analytical procedures in various stages of audit are: when applying analytical procedures in the risk assessment stage,they did not pay attention to the huge operating pressure and debt repayment risk of Blue Mountain Technology,and ignored its fraud pressure;Blue Mountain Technology has a high pledge rate.Its general manager,Tan Shu,made equity pledge regardless of the interests of other shareholders,which is a selfish performance.In addition,there is also the problem of dishonesty in the disclosure of financial information,but the auditors have not attracted attention and attention;Inadequate implementation of internal control over sales and collection,and inappropriate evaluation of the company’s equity structure and governance;The interview procedure with customers and suppliers is a mere formality,without maintaining a rigorous skepticism,and lacking communication with key personnel;In the application of substantive procedures,there are situations where the disposal of fixed assets has not been investigated,the revenue of sales contracts has not been properly recognized,and the capitalization ratio of R&D expenses is high;During the overall review of the financial statements,we did not pay attention to the high operational risk,and evaluated and reviewed the overall rationality of the financial statements.After the problem analysis,this paper puts forward the following suggestions on the application of analytical audit procedures in the future audit practice:First,in the risk assessment stage,pay attention to the objectives set by the audited entity,fully communicate with key personnel,evaluate their ability to implement fraud and integrity issues,carefully evaluate the internal control defects of the enterprise,and fully understand the audited entity;Second,when applying analytical procedures in substantive procedures,pay attention to the combination of analytical methods,the correlation between financial data and non-financial data,the reasonableness of transactions,and actively investigate the differences;Third,when applying the analysis procedure in the overall review stage,the auditors should maintain independence and professional suspicion,strictly perform multiple reviews,and reconsider or add audit procedures for exceptions.As an audit method that can improve audit efficiency and audit quality,the analysis procedure has been paid more and more attention by the industry.Through practice,certified public accountants can greatly improve the quality and efficiency of audit work through effective implementation of analysis procedures.It is hoped that this study can help auditors find audit risks,improve audit efficiency,and improve the practical ability of auditors to use analytical procedures.This paper studies audit methods to improve audit efficiency and audit quality,and provides reference for auditors to apply analytical procedures in audit work.