Research On Audit Risk Of New Retail Enterprises

With the development of information technology,the retail industry is undergoing profound changes.Online retail has brought challenges to traditional offline retail,but there are also shortcomings such as consumer experience and quality assurance.Therefore,a new retail model has emerged,becoming a new retail method that integrates online and offline channels with logistics resources.This model has received high attention from market operators,and the gradual transformation oftraditional retail industry into a new retail model has become a common development trend in the retail industry.The research focuses on assessing audit risks and their origins in three selected new retail industry businesses,which serve as the heart ofthe case study.By adopting the perspective of accounting firms and utilizing case analytic and literature review methodologies,this study cites relevant theories such as modern risk-oriented audit theory,information asymmetry theory,and principal-agent theory to study the audit risk of Dahua Certified Public Accountants auditing three squirrel companies under the retail business model,And propose effective solutions to each risk point.This article will analyze the audit risks and underlying causes of the audit of the three squirrel companies by Dahua Certified Public Accountants from three levels: financial reporting level risks,significant misstatement risk at the recognition level,and inspection risk analysis.The major risks at the financial statement level are mainly reflected in the overall operating risks and internal control risks.Due to the risk of fluctuations in the raw material prices ofthe three squirrels,a single sales channel,and a large proportion ofmain products,these factors may have a negative effect on the business activities of the company,affect numerous items in the financial statements,and generate significant misstatement risks.At the same time,excessive concentration of equity,defects in food quality and information systems may lead to significant misstatement risks related to the internal control of the three squirrels.From the perspective of recognition level,risks mainly come from revenue recognition and inventory recognition.Among them,improper timing of revenue recognition and complex amount recognition pose a significant risk ofmisstatement in the revenue recognition layer.However,because of the high quantity and high stock at the end of the period,there is a higher risk of misstatement in the inventory recognition level.The main sources of inspection risks are the relatively lagging audit methods and techniques,as well as the shortage of versatile talents.Propose response and prevention suggestions for the audit risks of the three squirrels audited by Dahua Institute Auditors are mandated to have an in-depth understanding of the company’s business model when evaluating the risk of significant errors in financial reports.It is crucial for them to precisely set the audit’s scope and rigorously understand and examine the company’s internal control systems linked with its information and food safety protocols.identified audit risks,auditors should increase the application of data-driven audit methods,attach importance to original sales data and monitoring procedures,and implement monitoring procedures.Regarding the inspection risk ofthe three squirrels,providing audit software for new retail companies to improve audit efficiency and optimize auditors’ audit thinking and cultivate versatile talents,Examining the audit risks associated with the three squirrels provides a broad basis to guide other new retail businesses in mitigating the audit risks inherent in accounting firms.