Audit Risk Of Related Party Transactions And Its Preventive Measures

With the rapid economic growth and the upsurge of domestic mergers and acquisitions,related party transactions become a more common economic phenomenon.On the one hand,it can reduce transaction costs and optimize the allocation of resources.On the other hand,it also led to the use of related party transactions to whitewash the report,and caused a bad impact to the capital market.At the same time,because the complexity of the related party transactions has a strong concealment and diversity,it undoubtedly becomes a serious problem in the audit work.In recent years,with the accounting firm related party transactions audit failure cases emerging,the SFC has issued a lot of requests for accounting firms to attach importance to related party transactions audit risk of various documents.On March 23,2017,the Chinese Institute of Certified Public Accountants implemented the program to promote the quality of the year's theme activities.This requires all kinds of auditors,including CPA,to pay close attention to the audit risk of related party transactions and put forward effective precautions and strategies in the audit work.At present,the research on the audit risk of related party transactions mainly focuses on the influencing factors,supervision and disclosure,but there are few researches on how to guide and use the audit methods of related party transactions.In this paper,I take the Asian star chemistry as an example using the method of case analysis and normative study,on the basis of predecessors ' research,and used related party transaction and audit risk theory.This paper analyzes and expounds the causes of audit risk of related party transactions of listed companies from the connotation of related party transaction audit risk,and combines specific cases.From the perspective of CPA,this paper puts forward some measures to prevent the audit risk of listed companies ' related party transactions.Based on the above research,this paper expects to draw the following conclusions:(1)The audit risk of the related party transaction mainly includes the major misstatement risk and the examination risk,and the CPA cannot reduce the risk of the major misstatement,but it must be evaluated rationally.The inspection risk can be reduced to an acceptable level by the CPA through the execution of the corresponding audit procedures;(2)In the case of the star chemical,from the CPA's point of view,there are five causes of the audit risk of related party transactions:the lack of risk assessment of the major misstatement of the related party transaction,the inadequacy of relevant party transaction audit procedure,failure of related party internal control audit,CPA's dereliction of duty and incomplete system of audit quality control of related-party transaction;(3)The audit risk of related party transactions can be prevented from the assessment,identification and improvement of audit personnel's quality.To sum up,the related party transactions audit risk Research is helpful to improve the professional quality and level of auditor in audit practice,reduce the failure of audit personnel in related party transaction audit,reduce the occurrence of audit failures of related party transactions,promote the improvement of audit work level in our country,and help to maintain the normal order of our market economy.At the same time,the research on perfecting and supplementing the audit risk of related party transactions will also be carried out to some extent.