A Study on Audit Risks in Backdoor Listings in the Film and Television Industry: A Case Study of H&R Century Pictures

Jianlian Qin

doi:10.54254/2754-1169/2025.CAU26188

Advances in Economics, Management and Political SciencesOpen access

A Study on Audit Risks in Backdoor Listings in the Film and Television Industry: A Case Study of H&R Century Pictures

Research Article

Open Access

A Study on Audit Risks in Backdoor Listings in the Film and Television Industry: A Case Study of H&R Century Pictures

Jianlian Qin ^1*

¹ Yunnan College of Business Management

^*Corresponding author: 18987793269@163.com

Published on 20 August 2025

AEMPS Vol.211

ISSN (Print): 2754-1177

ISSN (Online): 2754-1169

ISBN (Print): 978-1-80590-321-5

ISBN (Online): 978-1-80590-322-2

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Abstract

In recent years, the number of backdoor listings in the film and television industry has increased, and audit risk issues have become increasingly prominent. This paper takes the case of H&R Century Pictures’ backdoor listing to examine the characteristics of audit risks specific to the industry. The study finds that audit risks in the film and television sector are mainly concentrated in areas such as revenue recognition, related-party transactions, accounts receivable, and inventory valuation. H&R Century Pictures inflated its profits and assets by prematurely recognizing revenue and fabricating accounts receivable. At the same time, it concealed related-party relationships through complex related-party transactions and multi-layered nested company structures, thereby increasing the difficulty of audit procedures. Additionally, overvaluation of inventory and insufficient provision for impairment are also significant audit risks in the industry. In response to these issues, auditors must strengthen their understanding of the film and television industry's complex business models, conduct penetrating reviews of related-party transactions, and carefully assess inventory valuations. Regulatory authorities should also improve accounting standards and auditing guidelines, enhance regulatory oversight, and promote the standardized development of capital operations within the film and television sector.

Keywords:

Film and Television Industry, Backdoor Listing, Audit risk

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