The Ministry of Finance issued a statement: The audit will target at 11 kinds of financial fraud, strengthen identification measures, starting from November 1

In order to guide accounting firms and certified public accountants to improve their practicing ability to deal with financial fraud and give full play to the role of audit authentication, the Ministry of Finance issued the Areas Prone to High Incidence of Financial Fraud and Key Countermeasures, which proposed countermeasures to strengthen identification of 11 financial fraud behaviors. These 11 financial fraud behaviors are as follows:

1. Fraud risks related to monetary funds

2. Inventory related fraud risk

3. Fraud risks related to construction and asset acquisition

4. Fraud risk related to asset impairment

5. Risk of income-related fraud

6. Fraud risks related to overseas business

7. Fraud risks related to enterprise merger

8. Fraud risk related to goodwill should

9. Fraud risks related to financial instruments

10. Abuse of accounting policies and accounting estimates related fraud risk

11. Fraud risks related to related parties

If you need to check your tax compliance or solve more difficult tax problems, please contact Yijiu experts for free consultation

Yijiu expert service

The Ministry of Finance will pay more attention to key areas of audit to control audit risks

Notice for further effective identification of financial fraud

Finance and Accounting (2022) 28

Department of Finance (Bureau) of Provinces, autonomous regions and Municipalities directly under the Central Government, Bureau of Finance of Shenzhen Municipality, Bureau of Finance of Xinjiang Production and Construction Corps, Institute of Certified Public Accountants, Accounting Firms:

For implementation of The General Office of the State Council on further standardize the order of financial audit Promote the healthy development of the certified public accountants industry opinion "(30 countries do hair [2021]), to guide the public accounting firms and certified public accountants improve the practice ability of dealing with financial fraud, fully give play to the role of audit verification, now we will notify the following related matters.

I. Fully understand the significance of increasing the focus on key areas of audit, controlling audit risks and further effectively identifying financial fraud

With the high quality development of the socialist market economy, the scale and scope of service of the CPA industry are expanding constantly, and it plays an increasingly important role in the construction of the socialist market economy. The central leadership attaches great importance to the CPA industry and has made important instructions for many times. Document (2021) 30 issued by the State Office clearly requires all regions and departments to start from the overall situation of economic and social development and comprehensively deepening reform and opening up, fully understand the importance of promoting the healthy development of the CPA industry, and put relevant work on the important agenda. The development of the CPA industry is generally good, and has made important contributions to improving the quality of accounting information and economic efficiency and maintaining market order. But there are still a small number of accounting firms and certified public accountants is not strictly abide by the auditing standards when carrying out audit services, in some key areas of audit audit program execution does not reach the designated position, insufficient audit evidence obtaining, failed to reveal the financial fraud problems, caused the social from all walks of life to the effect of certified public accountants responsibility to perform the high attention. , therefore, to guide the public accounting firms and certified public accountants audit focus areas and control audit risk, and further effectively identify financial fraud, is certified public accountants industry to implement audit verification responsibility, reasonable guarantee the quality of accounting information and financial report to help users make effective decisions determine important measure, It is an important foundation to ensure the long-term and healthy development of the CPA industry, and an important means to respond to social concerns, maintain market order and public interests.

2. Accounting firms should constantly improve the quality management system and audit procedures

Perfect quality management system is the cornerstone to improve the overall audit quality of accounting firms and prevent audit risks. All accounting firms should attach great importance to the standards of Quality Management of Accounting Firms No. 5101 -- Business Quality Management, Quality Management of Accounting Firms No. 5102 -- Project Quality Review, Auditing Standards of China for Certified Public Accountants No. 1121 -- Quality Management of Financial Statements Audit, Fully understand the systematicness and complexity of the task of building and improving the quality management system, do a solid job in implementing the work, and ensure the completion and operation of a unified quality management system within the scope of the whole company in accordance with the time requirements. The management layer of accounting affairs should attach great importance to, deeply participate in and lead to promote, according to the firm's own scale, service scope, business nature and specific circumstances, "tailor-made" in line with their own actual situation of the quality management system framework, put an end to blind "copy". All accounting firms should carefully compare the requirements of this notice, find out their own prominent problems and weak links in the audit link, timely and effectively identify, evaluate and cope with their adverse impact on the quality of practice, and improve their own audit procedures accordingly. Before entering the enterprise to collect enterprise financial, business information and the formation of customer risk analysis and response report, after entering the enterprise to the existence of financial fraud in key areas to take targeted audit procedures, effectively prevent, reveal accounting fraud. When implementing integration audit, pay close attention to the risk that management overrides internal control.

Three, certified public accountants should strictly implement audit standards, improve the ability to deal with financial fraud

Certified public accountants auditing standards must be strictly implemented in the entire audit process to maintain adequate professional skepticism, financial fraud risk factors such as alert, when identifying the possible misstatement due to financial fraud and involved in the management, should consider to evaluation of material misstatement due to financial fraud risk assessment results, And its implications for the nature, timing and scope of the audit process. Audit procedures should be strengthened, the proportion of random inspection should be expanded, and audit evidence should be increased to effectively control audit risks. In the audit process to the enterprise compliance with accounting standards to make professional judgment; To do well in other areas of the audit at the same time, increase of monetary funds, stock, projects under construction and purchase of assets, asset impairment, income, overseas business, business combination, goodwill, financial instruments, abuse of accounting policies and accounting estimates, related party relationships and transactions, such as 11 financial fraud is used in the field of high attention in recent years, effectively cope with (see attachment).

4. Financial departments and institutes of certified Public accountants shall continue to strengthen audit order management and business guidance

Financial department, institute of certified public accountants in public accounting firm practice quality check, whether to in the above key areas to implement risk-oriented audit idea, whether related audit procedures in place, to obtain audit evidence is enough to effectively support the audit opinion type such as included in the focus range. We should further standardize auditing order, handle punishment strictly according to law and regulations, resolutely clean up the "black sheep" in the CPA industry, strengthen shock and awe, and encourage accounting firms to improve their practice quality and professional reputation, and certified public accountants to improve their professional competence and build professional spirit. The Chinese Institute of Certified Public Accountants should dynamically grasp the new fields, new situations and new problems encountered in the audit process of certified public accountants, timely enrich and improve audit standards under the guidance of the financial department of The State Council, issue answers to questions, and strengthen the standardization and guidance of the audit services of certified public accountants.

This notice shall take effect as of November 1, 2022.

Annex: Areas prone to high incidence of financial fraud and key countermeasures