Research On Audit Failure Of Related Party Transactions In The Case Of Kingsun Optoelectronic Co.,Ltd

With the increasing prosperity and rapid development of the capital market,the number of enterprise groups is increasing,and related transactions have played an important role in industrial synergy and resource sharing.However,audit failure cases in the capital market have been common in recent years,especially involved related party and its transaction audit failure.The forms of related parties are often variety and intricate,and the audit of related party transactions has become an extremely important field in the audit business of accounting firms,especially the common field of audit failure.According to statistics,in the past ten years,the audit failures of related party transactions accounted for 68% of the audit failures of the China Securities Regulatory Commission.The frequent audit failures of related party transactions have caused investors to doubt the quality of financial information of enterprises and enable investors and the general public to CPA profession and the capital market do not trust.Therefore,we should pay attention to and understand the reasons for the failure of related party transaction auditing and how to prevent the occurrence of audit failures of related party transactions,thus promoting the orderly and healthy development of the securities market and the CPA profession.Based on the theory of information asymmetry and transaction cost theory,this paper combines normative research and case analysis to conduct in-depth research on the causes of failures in related party transactions and preventive measures.Firstly,with reference to the administrative punishment documents of the China Securities Regulatory Commission,the information of listed companies and related accounting firms involved in the use of related parties and their transaction fraud in 2011-2018 was summarized,the means of relevant enterprises used related parties and their transaction fraud,the performance of the audit failure and the results of the punishment are summarized,and the characteristics and reasons for the failure of the related party transaction audit are obtained.Immediately afterwards,combined with the case of Kingsun Optoelectronics,from the accounting firms’ s point of view,analyze the reasons for the audit failure from the audit subjects,the audited entity and the external environment.The reason included the lack of independence of CPA,the professional literacy of CPA is not high enough,the auditor did not maintain due attention and professional suspicion,the internal control of the related parties transaction of the audited entity were invalid,the auditing environment was fiercely competitive,the supervision was weak,and the punishment was light.Finally,based on theoretical analysis and case analysis,aiming at the reasons for the failure of related party audits in China,the countermeasures against the failure of related party transaction auditing are proposed from the auditors,accounting firms and external environment.Compared with the existing research,the difference in this paper is that it combines commonality and individuality,summarizing the analysis of the failure cases involving related party transactions in recent ten years,and analyzes the key points of the companies that have been repeatedly punished.Selects Kingsun Optoelectronic’s related party audit failure case,combined with the audit risk to study the reasons for the related party transaction audit failure.I hope to provide effective advice for CPA audit related party transactions to avoid audit failure.