Audit Quality Control and Financial Risk Prevention Strategies for CPAs under Multi-Objective Optimization Calculation Considering Sustainable Development Strategy

Abstract

Abstract Audit functions as the “guardian” of the capital market by overseeing economic activities and providing forensic analysis on the major projects and financial transactions of the entities it examines. The sustainability of auditing as a profession hinges critically on audit quality. This study aims to investigate the characteristics and elements that influence audit quality control, employing modern risk-oriented audit theory to formulate a financial audit risk assessment process. The research uses a multiple linear regression model to analyze factors affecting audit quality control among certified public accountants (CPAs). The model analyzes data from 513 A+H share listed companies, with parameters estimated using the Singular Value Decomposition (SVD) method within an overall least squares framework. Furthermore, the Particle Swarm Optimization (PSO) algorithm, a technique within the multi-objective optimization algorithm suite, is utilized to refine parameters in the manipulability Jones model. This adjustment is intended to better quantify the level of earnings management of the audited entities, thus enhancing the reflection of financial audit risks. Findings from the study reveal that the coefficient reflecting the impact of a CPA’s practice experience on audit quality control is 0.249. Additionally, it was observed that a 1% deterioration in the financial condition of an audited entity correlates with a 0.505% decrease in audit quality. For high-risk clients classified under ‘Special Treatment’ (ST), the range of practice years for CPAs is predominantly between 6 to 14 years, which may not fully meet the clients’ auditing needs. The study suggests that tailored audit surveys should be conducted for various client types prior to audit engagements. This strategic approach would enable better allocation of CPA resources, thereby enhancing audit quality control and the capability to mitigate financial audit risks.