
4.3 Preventing Material Misstatement
Risks at the Assertion Level
Material misstatement risks at the assertion level pert
ain to specific transactions, account balances, or disc
losures, directly impacting the accuracy and reliabilit
y of financial statements. To prevent material misstat
ement risks at the assertion level, enterprises must co
nduct thorough due diligence before acquiring anoth
er company. It is essential to take a firm stance on th
eir own interests, confirming that the target company
possesses robust profitability and normal operationa
l conditions that align with the enterprise's acquisitio
n objectives and that it can yield significant benefits
for the enterprise’s digital transformation progress. T
o mitigate risks associated with material misstatemen
ts at the assertion level, auditors need to conduct com
prehensive financial due diligence before any acquisi
tions, maintain a correct audit attitude, and avoid me
rely performing audits as a formality. Detailed testin
g of various transactions, account balances, and discl
osures should be conducted to identify misstatements
and detect fraudulent activities.
4.4 Preventing Detection Risk
To prevent detection risk, enterprises should first stre
ngthen the construction of the audit team and enhanc
e the quality of auditors. A qualified auditor should p
ossess solid professional capabilities, high ethical sta
ndards, and advanced risk awareness (Jia Tingting, 2
024). By enhancing their professional knowledge, au
ditors should acquire a variety of auditing methods a
nd multidisciplinary knowledge, including digital au
diting, information technology, and internal auditing,
to effectively address the increasingly complex audi
ting environment.
Fostering professional ethics is crucial; auditors s
hould receive thorough training in ethical standards t
o ensure they maintain objectivity, integrity, and pro
fessionalism throughout the auditing process. Establi
shing a robust auditing system involves formulating
and refining various regulations governing auditing p
ractices, clarifying auditing procedures, methods, an
d standards, thereby providing auditors with clear gu
idance and norms.
Optimizing the audit process is necessary to ensu
re an orderly auditing operation, minimizing detectio
n risks stemming from improper procedures. Establis
hing auditing standards, such as internal financial ma
nagement systems, codes of conduct for auditors, an
d auditing workflows and regulations, can facilitate t
he smooth execution of auditing tasks (Bai Xiaolin, 2
022). Implementing an audit review system to evalua
te critical audit documents, such as working papers a
nd audit reports, is essential to ensure the accuracy a
nd completeness of the auditing process.
Furthermore, a comprehensive audit supervision
mechanism should be established to monitor the audi
ting process in real-time, allowing for the timely iden
tification and correction of issues that arise during th
e audit. Utilizing modern auditing techniques and me
thodologies, such as big data and cloud computing, c
an significantly enhance the efficiency and accuracy
of auditing work, reducing detection risks caused by
human error. Strengthening communication with oth
er departments through timely information exchange
s can help verify the accuracy and reliability of audit
information. Ensuring the independence of auditors
is paramount; the audit department must maintain its
independence during the audit process, free from int
erference from management or other stakeholders, w
hile adhering to ethical standards and relevant legal r
egulations to ensure the objectivity and fairness of au
dit results
5. CONCLUSION
In summary, the digital transformation of enterprises
significantly impacts audit risks, encompassing eme
rging risk audits, material misstatements at the finan
cial statement level, material misstatements at the ass
ertion level, and detection risks. To mitigate these ris
ks, enterprises must implement corresponding preve
ntive measures, enhance the professionalism of audit
ors, cultivate adherence to ethical auditing standards
among audit personnel, ensure auditor independence,
and adeptly utilize digital technologies.
The effects of digital transformation on auditing
are multifaceted; they manifest not only at the techno
logical level but also involve updates to auditing phil
osophies and methodologies. For auditors, adapting t
o new auditing approaches in this evolving environm
ent requires continuous learning, particularly in infor
mation audit technologies. This commitment is essen
tial for providing robust support for the sustainable d
evelopment of enterprises and preventing the recurre
nce of audit risks.
Moreover, it is crucial to ensure that auditing pra
ctices meet the demands of the digital age while proa
ctively addressing emerging audit risks and formulat
ing flexible and effective risk management strategies.
Throughout this process, maintaining independence
and objectivity in audits remains a core principle.
This study acknowledges that research on emergi
ng audit risks and information audit technologies is s
till insufficiently developed. Future research could e
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