Author(s)

Wenlan Xu, Yan Chen

Corresponding Author

Wenlan Xu

Abstract

The purpose of this paper is to deeply explore the internal relationship between accounting estimation uncertainty and audit risk, and to provide guidance on strategies and methods for optimizing accounting estimation process and reducing audit risk. Firstly, this paper constructs the analysis framework of accounting estimation uncertainty, including its identification, evaluation methods and the mechanism of its influence on financial statements, and discusses the management strategy and supervision requirements of accounting estimation uncertainty. Then, the paper establishes an analysis framework of audit risk, and analyzes its relationship with the uncertainty of accounting estimation, especially the influence path of accounting estimation uncertainty on audit risk. On this basis, the paper further puts forward strategies and methods to optimize accounting estimation and audit risk management, including strategies to identify and evaluate the uncertainty of accounting estimation, management methods and tools to reduce audit risk, and the roles of accounting standards and auditing standards in reducing uncertainty and risk. Through the discussion of these strategies and methods, it is expected to provide useful reference for enterprises, audit institutions and standard setters.

Keywords

Uncertainty of accounting estimation; Audit risk; Positive correlation; Accounting estimation project; Audit risk proxy variable