The Legal Control Of Audit Risk Of The Related Party Transaction Of Listed Company

The related party transaction can be defined as the transaction of listed company isthe transaction between the listed company (or its subsidiary company) and its relatedparty. As a kind of neutral economic behavior, the related party transaction has apositive side. However, the related party transaction is the transaction between therelated parties, as the associated relationship between the two trading sides,one side canexercise control or significant influence over the other, the transaction of the two sidesis not in a fair and fully competitive market environment, so the related partytransaction might be deviated into unfair related party transaction easily. With thedevelopment of market economy, the related party transaction of listed company iscommon in our country, due to the imperfect regulatory system of the related partytransaction and other reasons, unfair related party transaction of listed company showsworse.Audit risk of the related party transaction of listed companiy results from thedevelopment of related party relationship and unfair related party transaction. Audit riskis an objective reality, and it can not be eliminated. However, the presence of unfairrelated party transaction has increased the audit risk of CPA.So it has an importantsignificance to explore the causes of audit risk of the related party transaction of listedcompany and use legal means to control them for the healthy development of the CPAprofession.The main body of the thesis includes three parts,which I will make a briefexplanation accordingly hereinafter.The first part devotes to discuss the related party transaction of listed company andaudit risk. First, it analyses the relevant legal concept of the related party transaction toclarify the meaning of the related party and the related party transaction. Then itdescribes audit risk of the related party transaction. Audit risk of the related partytransaction is due to the interaction of the material misstatement risk of the related partytransaction and the checking risk of the related party transaction and the legal risk. Andit definites the meaning of the risk factors.The second part devotes to discuss the causes of audit risk of the related partytransaction of listed company. The main line of this part is the risk factors of audit riskof the related party transaction.It mainly analyses the causes of the risk factors on the level of monitoring system of the related party transaction and audit activitiy.There arereasons of the legislature, the securities regulatory authorities, listed companies andcertified public accountants,and so on.The third part devotes to discuss the legal control of audit risk of the related partytransaction of listed company. Corresponding to the causes of audit risk of the relatedparty transaction discribed in the second part,the main line of this part is still the riskfactors of audit risk of the related party transaction.It analyses the measures ofcontroling audit risk of the related party transaction of listed company on the level ofthe construction and improvement of the regulatory system of the related partytransaction and audit activitiy.This thesis primarily explores the measures of controling audit risk of the relatedparty transaction of listed company on the level of the construction and perfection of thesystem.And the author hopes it can provide some useful ideas to improve themonitoring system of the related party transaction and audit activity.