Failure Of Related Party Transaction Fraud Audit Of New Third Board Enterprises

In recent years,China has vigorously supported the development of small and medium-sized innovative enterprises.The New Third Board,with its low entry threshold and flexible market trading system,has become the preferred stage for many small and medium-sized enterprises just starting out to build their dreams,and an important part of China’s multi-tiered capital market.However,while the New Third Board market is booming,there are also many problems.The laws,regulations and business system of the market are not sound,and the supervision and punishment are weak.Most listed enterprises in the market are advanced manufacturing and high-tech enterprises with high industry professionalism,weak internal control,centralized governance structure and financial system defects,which often provide opportunities for enterprises to conduct related party transaction fraud.When auditing institutions undertake audit business of listed enterprises on the New Third Board,the risk of audit failure is greatly increased due to the characteristics of the New Third Board market and the hidden diversity of related party transactions.This paper uses literature research method and case analysis method,combined with information asymmetry and modern risk-oriented audit theory,to study the related parties of listed enterprises on the New Third Board and their transaction fraud audit failures.First of all,the characteristics of the New Third Board market and listed enterprises and the characteristics of related party transaction audit in this market are studied.Secondly,taking Zhongxing Caiguanghua Accounting Firm’s failure to audit the related party transaction fraud of Blue Mountain Technology Company as a case,combining with the characteristics of the New Third Board market,the reasons for the failure of the firm’s audit are analyzed in detail.Finally,in order to prevent the failure of illegal related-party transactions of listed enterprises on the New Third Board,two levels of coping strategies are proposed.In terms of firms and certified public accountants,they include: reasonable undertaking of business,maintaining audit independence,enhancing professional competence,always maintaining professional caution,improving the risk assessment procedures of related-party transactions,improving audit procedures,innovating audit methods,and improving audit quality control system.Regulatory authorities: improve relevant laws and regulations and business systems,increase punishment,and improve market supervision.Through the combination of practical case studies and theoretical knowledge,this paper hopes to analyze and organize the root causes of audit failure of related party transaction fraud of listed enterprises on the New Third Board in detail,propose and summarize effective defensive measures from point to point,and enrich the theoretical research on audit failure of the New Third Board market.At the same time,it provides references for firms and auditors to develop targeted audit schemes when undertaking audit business of listed enterprises on the New Third Board,so as to prevent the failure of audit of fraud in related party transactions.