Research On The Audit Risk And Countermeasures Of Goodwill Impairment Of S Company

Since 2014,with the introduction of relevant incentive policies by the Chinese government,the M&A market has developed rapidly.Although mergers and acquisitions can help companies integrate resources,improve economies of scale,and further enhance corporate value.But there may also be potential risks.In current M&A transactions,the valuation of the acquisition target is generally high,and M&A has generated a large amount of goodwill.Multiple listed companies have suffered significant performance declines or even losses due to the impairment of goodwill,which has attracted widespread attention from all sectors of society.Faced with this situation,relevant departments such as the China Securities Regulatory Commission and the Ministry of Finance have further increased their attention to goodwill impairment matters.In 2018,the China Securities Regulatory Commission issued "Accounting Supervision Risk Reminder No.8-Goodwill Impairment",requiring listed companies to standardize the accounting treatment and information disclosure of goodwill impairment,and requiring audit institutions to further strengthen supervision,pay special attention to the impairment of goodwill of listed companies,and strictly prevent the risks brought by goodwill impairment.Therefore,based on the above macro background,as an important evaluator of accounting information of listed companies,it will be a meaningful research topic for certified public accountants to fully consider the potential risks of goodwill impairment in their audit work and design risk response measures in advance,in order to provide more authentic and objective audit information for external information users of enterprises.Taking S Company as an example,this paper analyzes the M&A process,the formation of huge goodwill and the impairment of S Company.Based on the modern Audit risk model,this paper analyzes the Audit risk of goodwill impairment of S Company from three aspects: financial statement level,recognition level and inspection risk.The analysis shows that the major misstatement risks at the financial statement level mainly include external environmental risks and corporate operational risks;The significant misstatement risks at the level of recognition include risks caused by inflated valuation of the target company,risks caused by performance commitments,risks caused by earnings management,and risks caused by insufficient disclosure of goodwill impairment information;Inspection risks include excessive reliance on third parties for information sources and insufficient competence of certified public accountants.Finally,the paper puts forward countermeasures for goodwill impairment Audit risk.It includes paying attention to the internal and external environment of the enterprise,judging the rationality of income method assessment,strictly reviewing the goodwill impairment test process,paying attention to the disclosure quality of goodwill impairment,strengthening the training of certified public accountants,improving audit procedure,and making rational use of expert work.