On Audit Risk Of IPO Related Party Transactions

From 2015 to 2017,there were 23 accounting firms punished for IPO audit projects,among which 15 accounting firms were punished for related party transaction audit,accounting for nearly 70% of the accounting firms punished.Related-party transaction is an important means for enterprises in financial distress to obtain benefit transmission.Companies listed in initial public offerings usually adopt abnormal related party transactions to optimize their financial conditions,which leads to great audit risks in the audit process.Because the abnormal related party transaction fraud has serious consequences for the audit failure of accounting firms,how to effectively prevent the audit risk of certified public accountants in the related party transaction field is of great significance to the healthy development of the capital market and the audit industry.Tianjian accounting firm has twice audited the IPO of Yuansheng electronic,but found no fraud risk of related party transactions in Yuansheng electronic,so Tianjian accounting firm was issued a warning letter by CSRC.As this case is typical,this paper will take the IPO audit of Tianjian accounting firm as the case to study the audit risk prevention of IPO related party transactions.This paper is mainly divided into the following four parts: first,the status quo of IPO related party transactions in China is analyzed,mainly from the IPO audit regulatory content,the professional ability of accounting firms and related party transaction fraud means analysis.Secondly,the study on the audit risk of IPO related party transactions,taking the IPO related party transaction audit of Yuansheng electronics as the case,studies the problems in the audit risk assessment of IPO related party transactions in detail.Thirdly,it comprehensively analyzes the causes and influencing factors for the formation of audit risks of related party transactions: incomplete IPO related party transaction information collection,insufficient risk assessment of related party transaction,irregular audit process of related party transaction,and imperfect IPO audit information disclosure.Finally,the paper puts forward some Suggestions for improving the audit risk assessment of IPO related party transactions with operability and practicability: to standardize the IPO audit information collection system,to expand the scope of risk assessment of IPO related party transactions,to improve the formulation of audit process standards for related party transactions,and to improve the IPO audit related party transaction disclosure standards.This paper adopts three research methods: one is the case study method,which analyzes the deficiencies in the audit risk assessment of Yuansheng Electronics' IPO related party transactions and provides relevant suggestions for other accounting firms engaged in IPO audit.Second,the literature research method,consulting relevant financial statement data and related theoretical literature,formed IPO related party transaction audit risk assessment related comb and classification data;Third,the comparative analysis method,this paper will be combined with the case of audit standards on the disclosure of related party transactions and international audit standards requirements for a horizontal comparison,put forward on improvement of related party transactions recommendations.The innovation of this paper lies in the following three aspects: first,it complements the case study of IPO related party transaction audit,and provides reference for accounting firms to deal with IPO related party transaction audit risk;Second,it complements the research on the audit risk assessment and prevention of IPO related party transactions,and provides more ideas for certified public accountants to deal with such audit risks.The third is to supplement the audit risk assessment of IPO related party transactions from the perspective of audit practice and objectively put forward the relevant countermeasures of accounting firm business process specification and internal quality control.