A Case Study On The Fraud Audit Of Related Party Transactions Of YX Company

With the rapid development of China’s economy, many enterprises and companies have been listed, and the stock market has changed a lot. As a result, many problems associated with the related party transactions have also been generated. In practice, the specified related party transactions can bring returns to scale for the enterprise, reduce operating costs, and make the enterprise manage capital and debt more effectively. Therefore, in the enterprise, between the parent company and subsidiary company, and subsidiary and subsidiary company usually built close economical ties to improve profits and increased the efficiency of management of the risk through related party transactions. But the related party transaction has two sides, in saving transaction costs, integration of enterprise resources, enhance the enterprise competitive advantage at the same time, they may also lead to inflating profits, investing transfer risk using related party transactions. Related party transaction has the characteristics of complexity and concealment, and now is growing. There are not only irregularities of the related party transactions, but the disclosure policy is not perfect enough. Many companies often use unfair related party transactions for financial fraud, which affects the healthy development of the securities market. This approach not only affects the good atmosphere of the capital market, but also damages the interests of investors. Therefore, it is far from enough to rely on the self-discipline of enterprises, and there is no time to delay to strengthen the external audit institutions.This article takes the YX company as the object and take a research on YX company fraud auditing problems in the process of related party transactions. The first part is the introduction, this part shows the background of this case, purpose and significance, research content and methods of this paper. The second part is the description of the case. Firstly, introduce the research object of this paper:YX, then introduce the overview of YX company relevant transactions, analyze the problems of YX company, using three typical cases which are using the fund occupation, the illegal guarantee, and the Dereliction of duty of accounting firm. The third part is the case analysis, on the foundation of text, expounds the theory basis of related party transactions, disclosure of YX company which did not mention the related parties, then identify and find problems existing in the audit process, and then analyze the reasons of these problems. The fourth part is the countermeasures and suggestions. In view of the problem of the related party transaction fraud in YX company, the corresponding improvement measures and suggestions are put forward from two angles of the CPA’s professional quality and the accounting firm to improve the related procedures and methods. The last part is the conclusion.Based on the typical case, there may be a general introduction to related party transactions in the actual work of the problem, propose optimization of identification methods and audit procedures. I hope this paper can help CPAs better implement the audit of related party transactions of the audit, and also can provide a certain reference value and strong guide to the accounting firm.