Research on the Prevention and Response of Goodwill Impairment Auditing Risk Based on the Audit Case of Zeus Entertainment

Abstract

The impact of goodwill on financial statements has attracted attention from all walks of life. The huge impairment of goodwill in A-shares at the end of 2018 made goodwill once again the focus of discussion and research. The uncertainty of accounting estimates for the subsequent measurement of goodwill and the complexity of the impairment testing process have long brought greater difficulties to financial accounting and CPA auditing. This article selects the audit reports of A-share listed companies as a sample, and analyzes the main audit response measures for goodwill impairment matters listed in the key audit matters to understand the status of goodwill impairment audits by CPAs. Based on the statistical analysis results and the summary of relevant administrative regulatory measures of the China Securities Regulatory Commission, the main risk points of the current goodwill impairment audit inspection risks were summarized according to the audit business stages. Thirdly, this article selects representative audit cases of listed companies in the media industry for case analysis. After comprehensively elaborating on the goodwill formation and subsequent measurement process of the case company, this article conducts an in-depth analysis of the main audit measures taken by certified public accountants on the company's goodwill impairment matters, and analyzes the project's goodwill impairment based on the goodwill impairment audit risk model. Value audit risks are analyzed and problems that may lead to inspection risks are summarized. The conclusions drawn based on statistical analysis and literature review were verified, and the causes of the problems were analyzed based on the case background. Finally, this article puts forward countermeasures and suggestions for preventing and responding to goodwill impairment audit risks from both short-term and long-term aspects.