An Auditing Case Study On Related Party Transactions Of AT Company

In our country, civil audit originated in the early 20th century. Its development deeply influenced by western countries civil audit. From the "Bankruptcy of South Sea Company", "Case of Maas Ghat", and "Case of Enron", audit cases occur frequently, and that reminds the importance of civil audit. Listed companies growing, the audit of listed companies has become a hot career. For auditors, which is CPA, the interests of the large-scale increased will stimulate the enthusiasm of the work. It shows that Chinese enterprises are bigger and stronger. However, it also brings out a quantity of problems and faults, since securities market’s supervision is not serious enough, the listed company level is not high, and some companies make false financial statements for their own benefit or other reasons. Since late 1990s, our country has undergone a series of financial fraud cases, and thus began the study of financial reports and auditor’s responses. Case of Guangdong Railway, Taiwan Bardon, and Ymguangxia were exposed, and the public gradually understand the audit with analysis of failure causes and popular means in financial fraud. Among of them, related party transactions take large piece of fraud. Yaxing Chemical, Zixin Pharmaceutical, Beisheng Pharmaceutical companies, all of them had related party transactions problems of audit. This study is also a listed firm in pharmaceutical. On the background, this paper is representative in the area.The article is made of three parts. Firstly, it starts from AT related party transactions audit case. It explains the background of the case occurred, and significance of the study. Then, it introduces the AT company’s development, and tells the audit process by three stories. Secondly, after analyzed of reading, it revealed the main reason for audit problems. Finally, the article presents three proposals related to the practical strategies to minimize the harm by failures to the related party transaction audit.