Study On The Transaction Audit Of Related Party Of Listed Companies

With the rapid development of China’s economic market,more and more listed companies have emerged in the market,and the corresponding related party transactions have become increasingly frequent.This kind of transaction is a common form of transfer of resources or obligations between company groups.Related party transactions are divided into two types,one is fair related party transactions,the other is unfair.Related party transactions have their advantages.For example,reasonable and compliant related party transactions can reduce transaction costs and improve efficiency.Of course,there will also be unfair related party transactions.The reason is that the related party relationships and transactions are very complicated and diverse,and the existing laws and regulations are not binding enough on them,which makes listed companies frequently manipulate stock prices and adjust profits by taking advantage of the characteristics of related party transactions.This will not only damage the rights and interests of creditors and investors,but also affect the normal market order.Although the regulatory authorities have also established certain laws and regulations to prevent the occurrence of unfair related party transactions,there are still some enterprise groups hiding related relationships through non-related means,in order to avoid taxes,manipulate income and increase profits.In this paper,Hua Ze Cobalt and Nickel Company(hereinafter referred to as Hua Ze Cobalt and Nickel)is selected as the research object,and the problems occurred during its audit by Ruihua Certified Public Accountants(hereinafter referred to as Ruihua Institute)are taken as the research object.As a A-share listed company,Hua Ze Cobalt and Nickel had only 177.92 yuan left under its parent company’s balance sheet at the end of the third quarter of 2017,which is called "the poorest listed company in history".From the beginning of 2016 to January 23,2018,the company has been continuously watched and punished by regulatory agencies for up to 47 times.As the audit institution of the company,Ruihua Institute was also subject to administrative punishment by the CSRC on December 29,2018.This case is a typical case of related party transaction audit problems.The main content of this article consists of six parts.The first part of the paper briefly explains the background and significance of this research topic,combing the theoretical results of related party transaction audit at home and abroad.Secondly,it puts forward the specific research ideas and overall framework of this paper,mainly including the research content,technical route and so on.Finally,the research methods and innovations adopted in this paper are expounded.In the second part,firstly,the related party transactions are briefly described.Then from the definition,object,procedure and method of related party transaction audit,the four aspects of related party transaction audit are explained.Finally,it introduces the relevant theoretical basis of related party transaction audit.The third part first analyzes the current situation of related party transactions violations of listed companies in China.Secondly,the current situation of related party transaction audit is analyzed.Once again,the outstanding problems in the audit process of related party transactions are discussed in depth to find out the deep-seated reasons for these problems.The fourth part,taking Hua Ze Cobalt and Nickel Company as an example,introduces briefly the situation of Hua Ze Cobalt and Nickel Company and Ruihua Certified Public Accountants.Then it analyzes the unfair related party transactions of Hua Ze Cobalt and Nickel Company.Secondly,it elaborates the auditing procedures implemented by Ruihua Certified Public Accountants for related party transactions of cobalt and nickel in Hua Ze.Thirdly,describe the punishment results of the CSRC on both parties.At last,the paper analyzes the problems and reasons in the audit of related party transactions by Ruihua Certified Public Accountants.The fifth part puts forward suggestions to improve the audit of related party transactions through three aspects: accounting firms and certified public accountants,government supervision departments and audited units,which can provide reference for preventing problems in the audit of related party transactions by other accounting firms.The last part is a summary of the research content of this paper,and points out the deficiencies of this paper.Based on the audit case of related party transactions of Hua Ze Cobalt and Nickel Company by Ruihua Certified Public Accountants,the research prospect of related party transactions audit is put forward.Through research,we can find that related party transactions have become a common way of transactions in listed companies in our country.With the change of market environment,the means and methods of related party transactions also change,which brings great challenges to the audit work and makes it difficult for certified public accountants to audit.Based on the case study,the article puts forward the countermeasures from three aspects,one is to help Ruihua Institute to perfect the related party transaction audit work,the other is to provide some ideas for other accounting firms when conducting related party transaction audit.