Discussion On The Out Of Control Of Audit Risk Of Related Party Transaction

Since the 21 st century,our country's economy obtained the development which progresses by leaps and bounds.The prosperity of the economy has promoted the competition between enterprises into the white-hot stage.In the context of rapid economic development and increased competition,the number of related party transactions is increasing,the transaction amount is more significant,and the problems of many related party transactions are also generated,which has aroused widespread concern in society.Although the related party transactions to a certain extent,reduce the company's associated transaction costs and improve operational efficiency,but also become a means of corporate financial fraud.In the company's related party transactions,the transaction may be based on a non-fair basis because the party to the transaction can exert significant or even control over the financial and production decisions of the other party.Some companies,for a variety of specific motivations,tend to trade fictitious operating results through non-fair affiliates,manipulate corporate profits,whitewash financial statements,and ultimately achieve their ulterior motives.Fraudulent transactions of related parties not only cause great harm to the legitimate interests of small and medium investors,but also seriously undermine the normal operation order of the market and endanger the healthy and orderly development of the capital market.Although China's regulatory authorities have issued a series of relevant guidelines to curb such non-fair related party transactions which have had little effect,but there are still some companies use related party transactions of non-related and other new ways to avoid supervision.Meanwhile,due to the difficulty of defining the related party transactions,the complexity of the related party transactions and other characteristics,the CPA face a bigger challenge.Therefore,the related party transactions as a risk area,should be subject to the relevant regulatory authorities and audit staff of the focus of attention,but also need to be controlled by the internal management system of the listed company.To raise awareness of the audit risk of related party transactions of listed companies,to deepen research,to seek the most effective way to control audit risk,can not only improve the supervision system of related party transactions,establish a more strict internal management system of listed companies,further expand the audit theory,but also increase the transparency of information disclosure of listed companies,improve the quality of financial information and promote the health of China's securities market development and socio-economic orderly operation.In view of this,it is of certain practical significance to adopt the method of literature research and case analysisto discuss the control of audit risk of related party transactions in the case of Zhongzhun Certified Public Accountants' failure to audit the related party transactions of JiLin ZiXin Pharmaceutical Industrial.The whole article is divided into six chapters.The first chapter is the introduction which introduces the research background and significance,literature review,research ideas and methods and the basic framework of the paper.The second chapter is audit risk theory of related party transactions.Firstly,the audit risk and the related party transactions are summarized,secondly the influence of related party transactions on audit risk is introduced,once again the connotation and characteristics of audit risk of related party transactions are described,finally the theoretical basis of audit risk control of related party transactions is expounded.The third part is the case study on the basis of the previous article.The first part carries on the introduction to JiLin Zi Xin Pharmaceutical Industrial,the second part reveals the problems existing in the JiLin ZiXin Pharmaceutical Industrial related party transactions,the third part expounds the fact that the audit risk of the related party transactions of Zhongzhun Certified Public Accountants is out of control.The fourth chapter is about the audit risk existed in the audit of related party transactions of Zhongzhun Certified Public Accountants,including inherent risk,risk control and detection risk.The fifth chapter further analyzes the causes of uncontrolled audit risk of the related party transactions of Zhongzhun Certified Public Accountants,which mainly includes four aspects: there is a lack of effective management within the Zhongzhun Certified Public Accountants;the overall quality of CPA is not high enough;CPA did not implement a scientific audit method;related party transactions lack of effective supervision and violation of punishment.Chapter 6 is the relevant revelation of case analysis.On the one hand,the accounting firms need to strengthen their internal management.Certified public accountant should improve the overall quality,and use the modern risk-oriented audit approach scientifically in the related party transactions audit work.On the other hand,the regulatory body shall improve the supervision system of the related party transactions of listed companies and increase the penalties for the corrupt practices of related parties.Finally,the article briefly summarizes the research conclusions of this article,and points out the shortcomings of the paper,then indicates the audit risk research and development direction of related party transactions in the future.