Research On Audit Risk Of Affiliated Transaction Of Listed Company In China

As the organization forms and management mode of companies and enterprises develops,the affiliated transaction emerges. The affiliated transactions in the listed companies becomemore and more universal and frequent, and exsit some unfair and unstandard behaviors, andthese problems ofen associate with state-owned enterprise restructuring models of Chinesecharacteristics. There is a complex relationship between the listed corporations and theaffiliated parties, and it is easy to formate a group for the interest drive, they use the flexibletransaction mode to change the profit level and also operating performance, so that they canachieve the purpose of earnings management. These unfair affiliated transactions not onlyditort the resource allocation function of the capital market, mislead the investors, and alsocause higher audit risk and bring a new difficulty to the audit fieled at the same time.This phenomenon causes deep concern and consideration. It is the focal point in researchthat how to build a sound audit risk prevention and control system of the affiliatedtransactions in the listed company. At present, our research is still in the careful explorationstage, so this paper will stand in the angle of CPA to make the comprehensive and detailedanalysis of the affiliated transaction audit risk of the listed company on the basis of thedomestic and foreign research results: the paper first expounds the basic theory of theaffiliated transation audit risk, and then mainly introducts the modern audit risk model andthe classification of the risk factors, and analyzes the main expression forms of thsese riskfactors. Then the paper discusses the causes of the affiliated transaction audit risk from thetwo aspects of the material misstatement risk and the detection risk. Finally, in view of theabove questions, it focus on the analysis of the CPA’s selfgurd and control countermeasuresof the affiliated transaction audit risk in the listed company, and then briefly expounds thesuggestions of improving the external audit risk environment.The final study shows that, when we want to prevent and control the affiliatedtransaction audit risk in the listed company from the CPA’s angle, we must distinguish it fromthe general transaction audit at first. The accounting firm should understand and master the listed copany’s whole operations and evaluate its’ risk level carefully when undetaking thebusiness. Especially for those customers with frequent affiliated transactions, the accountingfirm should pay more attention and choose carefully. Then they should choose theprofessional auditors and advanced audit methods to perform the specific auditing proceduresfor the accurate identification of risk factors and the strict evaluation of the risk level, andthen strengthen the disclosure transparency of the affiliated transaction and set up a specificrisk fund to prevent and control the overall affiliated transaction audit risk level. In addition,we should also analyze to reduce the CPA’s pressure and the material misstatement risk fromthe two aspects from optimization the company’s organization structure and improving theaudit risk environment.