A Case Study Of Tianheng Accounting Firm Dealing With Related Party Transaction Audit Risk

In recent years,the economy of our country has gone through a rapid development,what brings more and more listed company.In this circumstance,accounting firm,the department who provides assurance service to listed company,becomes especially important.However,there are much risk during the auditing process,one of them is about related party transactions.Related party transaction is different from the common transaction,what makes the risk that auditors facing at a high level.So CPA should pay much attention to related party transactions,and should also realize that it’s essential to put down the related party transaction audit risk in a reasonable range,which is the necessary element to ensure the success of the auditing.This essay uses the method of case study,from CPA’s view,take Tianheng Accounting firm auditing SHT company as example,study the auditing process of auditors,put forward some advice for problems,hoping to give guidance to the peers.This essay has four parts.The first part starts at the circumstance and the meanings of choosing the topic,tease the documents in domestic and foreign,from the perspective of auditors,with the intention to improve the ways of auditing.The second part stands on the truth that SHT Limited Company was punished by CSRC,set forth the truth how the Accounting firm audit SHT Limited Company using related party to manipulate profits.The third part is based on Audit Risk Model,Fraud Triangle and such audit theories,talk about the problems existing in the process of auditing,such as the auditors didn’t recognize the hided related parties,and substantive procedures were not enough,further to reveal the reason for these problems,which is because the accounting firm doesn’t attach importance on clients,etc.this is also the reason for auditors need to have special solutions.The last part of the essay concludes the case and puts suggestions from the point of three important process.So auditors should bring related party transactions auditing to the forefront,always keep high degree prudence,execute the auditing methods according to planning.Only by this,can auditors make a progress in improving audit quality,and provide a guarantee for the society.