Application Of Professional Skepticism In The Audit Of Related Party Transactions

As China is now in the period of continuous improvement and development of capital market,the rapid development of economy provides a good basis for economic transactions between listed companies.With the establishment of a large number of subsidiaries,mergers and acquisitions,the number of related party companies of listed companies has increased greatly,and the forms of related party transactions are complex,which hinders the supervision of relevant institutions.In the audit of related party transactions,although the audit content and form of related party transactions are clearly stipulated in the relevant audit laws and regulations of China,due to the complex content,the wide range and the inadequate audit of certified public accountants for related party transactions audit,the failure of related party transactions audits is not uncommon.Looking at the typical audit failure cases of listed companies in recent years,we find that most of the audit failures of related party transactions are closely related to the lack of professional skepticism of CPAs,such as not discerning all related parties and their transactions carefully,not keeping alert to related party information when checking records or documents,not evaluating audit certificates of related party transactions prudently and so on.In view of the above problems,this paper chooses the audit case of *ST Tianma by PricewaterhouseCoopers Zhongtian Accounting Firm,and adopts the research method of combining normative research with case analysis.Firstly,this paper introduces the theoretical knowledge of related party transaction audit and professional skepticism,and then makes a deep analysis of the specific application of professional skepticism in related party transaction audit by combining the *ST Tianma related party transaction audit case.Finally,it summarizes the successful experience of the application of professional skepticism by PricewaterhouseCoopers in this case.This paper draws the following conclusions: in the audit of related party transactions,CPAs should focus on the audited units and their environment,the social relations between shareholders and senior managers of the audited units,the establishment of a targeted audit procedure system for related party transactions,and keep high alert to abnormal transaction.The innovation of this paper is to summarize the application of professional skepticism in related party transaction audit.In most other literatures on related party transaction audit,there is little or no mention of CPA's professional skepticism.Secondly,most of the literature takes the cases of related party transaction audit failure as the research object.The solutions and countermeasures proposed need the support of the actual cases.This paper summarizes the successful experience of CPAs in the related party transaction audit from the successful cases of PricewaterhouseCoopers Audit,which is more convincing and practical.