The Case Study On The Loss Of The Transaction Audit Of The Affiliated Party Of The BS Pharmaceutical Company By The Shenzhen Pengcheng Accounting Firm

Along with the boom of our country's enterprises mergers and acquisitions,the amount of the related party company gradually increases,the number of related party transaction become frequently,as well as related parties and their transactions format tend to be diversified and complicated.However,due to the imperfect system of related party relationships and transactions in our country,related parties bring convenience and efficiency and at the same time bring opportunities for the financial fraud of the company.Related party transactions are the multiple zones of audit failure in China's capital market in recent years,which is also the focus of government regulation.This paper selects a case that the audit failure of Shenzhen Pengcheng accounting firm to the Beisheng pharmaceutical's related party transactions as the analysis object,and analyzes this case comprehensively and deeply.This paper cards all kinds of concept about audit failure of related party transactions,at the same time analyzes the case that the audit failure of Shenzhen Pengcheng accounting firm to the Beisheng pharmaceutical's related party transactions.Starting from the specific methods of financial fraud in Beisheng pharmaceutical and the problems existing in the related party transactions audit process,obtaining the specific reasons for the audit failure.By analyzing and summarizing these reasons,providing some experiences and suggestions to avoid the future of audit failure of related party transactions.This paper firstly explains the relevant concepts of related party transactions and audit failure,and based on these explanations analyzes the audit failure of related party transactions and other relevant concepts,such as: audit risk,financial fraud and business failure.From a macro point of view,the paper expounds reasons for audit failure of related party transactions,including CPA's negligence and fraud,accounting firm's audit quality control system is not sound,audited company financial fraud,the disorderly competition of the CPA industry and the weakness of government regulation;at the same time,elaborates the principal-agent theory,information asymmetry theory and audit conflict theory.These theories of related party transactions and audit failure provide a basis for the discussion of the specific problems and solutions that the audit failure of the Shenzhen Pengcheng accounting firm to the Beisheng pharmaceutical's related party transactions.Secondly,this paper discusses the case that audit failure of the Shenzhen Pengcheng accounting firm to the Beisheng Pharmaceutical's related party transactions.This paper mainly introduces the basic situation of Shenzhen pinching accounting firm and Beisheng pharmaceutical Co.,LTD.,and reviews the whole story of audit failure of related party transactions.Beisheng pharmaceutical mainly uses these financial fraud methods,including not disclosing the relationship of related parties;not disclosing related parties and major shareholders occupy the listed company's capital matters;making false records of operating income through related party transactions.In terms of problems in audit process failure of the Shenzhen Pengcheng accounting firm to related party transactions,mainly from three aspects: not fully implement inquiry,investigation and other procedures to identify hidden related party transactions;there is a deviation in identifying and evaluating related parties' major misstatement risk;and no specific measures have been taken to deal with related party transactions.Through the analysis of the punishment by the China Securities Regulatory Commission(CSRC)on the Shenzhen Pengcheng accounting firm and its certificated public accountants as well as Beisheng pharmaceutical and its relevant officials,this paper describes the results of the audit failure of related party.Thirdly,analyzing the reasons for the audit failure of the Shenzhen Pengcheng accounting firm to related party transactions.This paper explores the causes of the audit failure of related party transactions from three perspectives: certified public accountants,accounting firms,audited entities and external environment of the audit industries.On the basis of internal and external factors,the reasons for these problems are analyzed.From the certified public accountants and accounting firms' viewpoint,the independence of CPA is missing;the professional quality of certified public account is not high enough;the certified public accountants have not maintained professional skepticism.In terms of audited entity,information disclosure of the Beisheng pharmaceutical and its related parties is not standard;Beisheng pharmaceutical increases revenue and completes benefit delivery through related party transactions;the internal control system of the Beisheng pharmaceutical is not perfect.From the external environment analysis of the audit industry,the supply and demand is unbalanced and the competition is fierce in audit industry;weak supervision of the CPA industry;the existing laws and regulations are not enough which is also an important external factor for the audit failure of related party transactions.Finally,the conclusions and implications are drawn from the case analysis of the audit failure of the Shenzhen Pengcheng accounting firm to the Beisheng pharmaceutical's related party transactions.Beisheng pharmaceutical financial fraud and the imperfect of internal control system are the root causes of the audit failure of related party transactions;the lack of independence and professional competence of certified public accounts directly leads to audit failure;the disorderly competition environment of audit industry and the weak government regulation result in the audit failure.This essay starts from the case that audit failure of the Shenzhen Pengcheng accounting firm to the Beisheng pharmaceutical's related party transactions,summing up its experience,making some suggestions to protect CPA from audit failure of related party transactions.It mainly includes strengthening the independence and professional competence of CPA is the premise to avoid audit failure related party transactions;Perfecting the pertinence of related party transactions audit procedure system is the foundation to avoid audit failure of related party transactions;Strengthening audit quality control of accounting firms is the necessary to avoid audit failure of related party transactions;Improving the supervision system and increasing the penalties for violations is the external guarantee to avoid audit failure of related party transactions.