Research On Audit Problems And Solutions Of Related Party Transactions Financial Fraud From CPA Side

The focus of financial research is also one of the difficulties,including the frequent financial fraud of listed companies.However,the conventional tricks of companies engaging in financial fraud to create false business conditions--related-party transactions,if strictly regulated,will be substantially reduced,so it is necessary for people to take cautions.The "Case of Yinchuan Guangxia Industrial Corporation" exposed in 1999 was the starting point for financial fraud of listed companies in China.It caused great sensation both at home and abroad.Not only that,it also sounded an alarm for China's regulatory authorities.Since then,the financial fraud incidents of listed companies have gradually opened and are continuously exposed,such as the benefit transfer to related parties-the case of Beisheng Pharmaceutical in 2004 and the case of Yaxing Chemical in 2009.However,due to the lack of corresponding laws and regulations in China,it is difficult to form a normative framework for related-party transactions.There being no strict restriction provides a breeding ground for financial fraud.From the general perspective,financial fraud has hindered the rapid development of China's economy;from the specific perspective,it not only undermines the rights of small and medium shareholders,but also does not help the long-term development of fraudulent companies.Meanwhile,financial fraud puts forward a challenge for auditors and the audit industry and increases the audit risks.This indicates that some auditing agencies have large flaws and hidden dangers in the prevention and control of audit risks,which not only shows that the auditing industry should attach great importance to it,but also shows that practical policies are urgently needed to restrain it.Combining the current situation of China and the research findings of domestic and foreign experts and scholars,use the method of studying both theory and case,this article studies the financial fraudulent behavior based on related-party transactions from the perspective of audit.First,based on the theoretical analysis of related-party transactions,this article works on the related concepts and theories of related parties and related-party transactions,introducing the relevant provisions on disclosure of related-party transactions and the meaning and characteristics of financial fraud.Among them,the three theories of principal agent,transaction costs,and fraud triangle may clearly explain the value of audit,the rationality of related-party transactions,and the causes of financial fraud,laying the theoretical foundation for the following study.Then,this article analyzes the current situation,existing problems and causes of the problems of financial fraud of related-party transactions,and gives some suggestions mainly from the perspectives of improving management system of the accounting firms,improving the comprehensive quality of auditors and establishing specific audit procedures and methods for financial fraud of related-party transactions.Finally,this article focuses on the case that China Audit Asia Pacific Certified Public Accountants LLP did the wrong audit to Honz Pharmaceutical Co.,Ltd..The article analyzes the use of related-party transactions in financial fraud and reasons why the auditors did not identify,and proposes suggestions.