Research On Related Party Transactions Audit Of Listed Companies

With the rapid development of China's economy and the continuously improving securities market, as well as the influence of economic globalization. The operation mode and structure of listed companies have been improving. In order to take the lead in global finance environment full of fierce competition, achieve the integration of industry chains and take the preemptive opportunities of market, listed companies usually take control of other companies, establish joint venture or conduct cooperative management in many ways, including mergers and acquisitions, technological cooperation, the integration of industry chains and mutually exploitation of the market. It is followed by complicated relationship among related parties, where related party transactions facilitate scale effects among companies, which is conductive to lower the cost of searching information and business transaction and enhance the holistic competitiveness. Meanwhile, as related party enterprises tend to have certain economic interest relationship, many companies conduct financial fraud through concealed related party transactions, pretending to increase operating performance, transporting economic interest and doing tax evasion and fraud. This act of fraud not only does harm to the interest of exterior personnel, creditors and investors included, but poses obstacle to supervision and regulation of personnel in relevant organizations. Since related party transaction has its own uniqueness, such as varieties, complexities and concealment, there are higher auditing risks about it,which has become the special focus of auditors in the process of auditing. Then, the paper will introduce the current theory of related party transaction and analyze the problems above with the case study of Yang Mei Chemical Co., Ltd.There are five chapters in this paper.The first chapter is introduction, presenting the research context and meaning research status and literature review, research method, innovation and structure of this paper.The second chapter comprises two parts, the first part is relevant connotation, including the definition of related parties and transaction. The second part is introduction of auditing risks of related party transactions.The third chapter is about case studies, giving an elaborate introduction of fraud cases of related parties in Yang Mei Chemical Co., Ltd.. In the first part, it introduces the basic situation of Yang Mei Chemical and its related parties. Then it analyzes the fraud method, auditing problem, fraud motive causes of Yang Mei Chemical fraud case, followed by some illustration.The fourth chapter is about illustration from the cases, and it puts forward suggestions in the perspective of accounting standard, supervision system, auditors and audited bodies.The fifth chapter is the research conclusion of this paper.The innovative points of this paper are manifested as follows: first, it brings forward the reference design of relevant accounting standard and supervision system through studying the problems and reasons in the Yang Mei Chemical fraud case and associating the most cutting-edge theory. Second, the current studies center on the definition of disclosure and supervision, and there is little studies paying attention to how to design or implement effective auditing plan of related party transactions. This paper works out the auditing procedure and method based on fraud issues of related transactions companies after summarizing the conventional methods of fraud by companies through related party transactions.The weakness of this paper consists in the fact that it makes some preliminary discussions on some conventional problems emerging from related party transactions auditing reflected by specific cases, and that a complete system of knowledge and theory has not been formed. Moreover, relevant suggestions and feasibility of auditing procedures put forward in this paper are to be verified for lack of practicalness.