The Analysis Of Risks On Related Party Transactions' Auditing

The related party transaction is a surplus management method used by the listed company,and it is also one of the main means for the company to manipulate profit and engage in fraud.The proper use of related party transactions can help the listed company save transaction costs,but it can also gain unfair benefits through complex and covert non-fair related party transactions.Now the research about the related party transactions auditing is mainly focus on the following areas:the definition and identification,disclosure,and control of related party transactions.However,due to factors such as immature laws and regulations,there has been no effective method for audit related party transactions.Combined with the theoretical and use the case analysis method to analyze the typical cases on the market can provide us guidance for the actual audit work,and it is of practical significance for the CPA to avoid risks in the related party transaction auditing.Sainty Maring Corporation Ltd.(Sainty Maring)is a typical case in the recent capital market that mainly uses related party transactions to achieve self-interest.On the stage of audit risk and related party transactions theories,using the modern risk-oriented auditing,The purpose of this paper is to take major misstatement risk analysis and inspection risk analysis on total audit risk system.The study of this article starts with the establishment of related parties,and it analyzes the fact that they use of related party transactions to achieve corporate fraud.Based on the audit risk process,it analyzes the three aspects:the company's overall misstatement risk,the specific audit risk of the related party transaction,and the inspection risk.The risk factors that cause audit risk in related party transactions include eight perspectives:external environmental risk,corporate operating risk,internal control risk,information disclosure,non-relationship of related party relationships,non-fair related party transactions,and CPA competency and independence.Conducted the analysis,The following conclusions are drawn:1.The audit risk in related party transactions mainly comes from the company's overall misstatement risk,the specific audit risk of related party transactions and inspection risk.2.The company's overall level of material misstatement risk factors related to related party transactions are:industry risk,regulatory environment risk;business development risk,target strategic risk,performance index risk,internal control risk,equity structure risk,and independent director risk.3.Specific audit risk factors of related party transactions include information disclosure risk,related party relationship non-correlation risk and non-fair related party transaction risk.4.The auditing inspection risks mainly come from the CPA's competence and prudence risk and independence risk.This article through the audit risk model,combined with specific cases to take all-round,multi-angle analysis of the related party transaction auditing risk.I hope this case study can enrich the theories of related party transactions auditing practice and provide practical guidance for the future audit of listed companies.