A Case Study Of Audit Of F Company's Related Party Transaction

With the continuous expansion of the size of listed companies,the proportion of related party transactions in the transaction process is also increasing.On the one hand,related party transactions can indeed reduce transaction costs of transaction,to a certain extent,and improve transaction efficiency.On the other hand,related party transactions can easily be manipulated by interested people and become tools for the transfer of improper interests.Therefore,effective auditing of related party transactions becomes extremely important.This paper analyzes the auditing process of the F Company's related parties and their transactions.F Company disposes of financial statements by the sale of equity to being “disassociation” and concealing large amount of related party transactions to hide the facts of bad business practices.During the audit process,SK Certified Public Accountants Co.,Ltd.as an external auditor of F Company,make series of mistakes led to the final publication of the wrong audit opinion.This paper analyzes the possible reasons for these audit problems,and combines theoretical and practical suggestions on how accounting firms identify and review related parties and their transactions in the process of future audits: First,the auditors need to make a full understanding of the equity structure,background of shareholder,major clients and important suppliers of the audited organization,investigating and focusing on identifying the special relationship hidden in the abnormal transactions.Secondly,auditors need to fully implement the risk assessment process in the audit process,pay attention to the discussion of the project and learn from expert opinions,analyze the procedures throughout the audit work,and establish a special related party transaction audit standard process.From a long-term point of view,accounting firms should also strengthen their training in CPA competence and awareness,and jointly establish a CPA list of integrity in order to better standardize the behavior of CPAs.The innovation of this paper lies in the analysis of the whole process of F-related party transaction audit,revealing the main motives and means of related party transactions,and analyzing the problems in the process of auditing by SK Certified Public Accountants.As well as the possible causes of this result,finally put forward feasible solutions and actualize a more targeted audit process.