A Research On The Related-party Transactions Audit

In order to deal with the fierce competition of market economy, the related party transactions has become a common phenomenon in the daily business activities of enterprises. Normal related-party transactions can help enterprises reduce transaction costs and improve the efficiency of the transaction. However, companies will also use inappropriate related party transactions for the interests of the conveyor and profit manipulation, which will make losses to shareholders and society. Identifying, assessing and responding to the risks of material misstatement associated with a company's relationships and transactions with its related parties has become a very sensitive part.Firstly, the article research the essays about the related party transactions audit. Secondly, the article introduces the purpose of the related party transactions audit and the audit procedures in China. The article also analyzes the related party transactions characteristics of auditing risk and fraud signals that auditors need to maintain sharp vigilance. Thirdly, the article analyzes the case to find out material misstatement associated with the company's relationships and transactions with its related parties and try to find ways to solve the problems. At last the article combined with the situation of our country to put forward suggestions. In this paper, the main research method is the theory study and case analysis. Combined with Zi Xin pharmaceutical case analysis, this paper puts forward the following suggestions on how to improve related party audit. First of all, auditors need to perform appropriate audit procedures to identify hidden related party relationships and transactions. To this end, the auditors need to review the structure of social relations. What's more, the auditors should investigate significant customers and suppliers and should identify unusual transactions behind the related party relationships. Second, auditors need to improve risk assessing and related work. To this end, the auditors need to focus on group discussion and make use of experts' work. In addition, the quality control system is also effective measures to reduce audit risk. Finally, the relevant government departments need to improve the related party transaction police and increase the intensity of supervision and punishment.Identifying, assessing and responding to the risks of material misstatement associated with a company's relationships and transactions with its related parties are this article's innovation. Though previous studies have been carried out to the related party transactions audit, most scholars didn't choose the angle. The deficiency of this paper is that the analysis just stays in the author's knowledge level.