A Case Study On Audit Of Related Party Transactions Of RS Accounting Firm

With the increasingly fierce business competition,more and more companies have expanded their scale and enhanced their competitiveness through mergers and acquisitions,joint ventures,and diversification strategies.At the same time,a large number of related parties and their related party transactions have emerged.There are many forms of related party transactions,and the relationship is also complicated.In addition,the systems of related party transactions in China are still not perfect,which has facilitated many illegal enterprises to use related party transactions to implement fraud.In recent years,cases that have been exposed due to fraudulent transactions by related parties have occurred frequently.It causes the impact on not only accounting firms and CPAs,but the public trust of the entire audit industry.What's more,it also disorganizes the order of the capital market.These have caused big concern about the failure of related party audits.The paper mainly uses the method of case study,and selects Huaze company which was just punished by the China Securities Regulatory Commission due to fraud in related parties in 2018.From the perspective of accounting firms,it explores the problems that RS accounting firms have in the process of auditing.Subsequently,based on the relevant research results and theoretical basis,the paper analyzes the reasons for the audit failure of RS accounting firm,and summarizes them as follows: Firstly,the auditors did not maintain professional skepticism on unusual transactions;Secondly,the audit procedures are not targeted;Thirdly,auditors fail to comply with professional ethics;Fourthly,the accounting firm management system is not perfect.Finally,combined with the above four reasons,the paper puts forward some suggestions for the audit of related party transactions in the future: including maintaining the necessary professional skepticism,implementing targeted audit procedures,improving the comprehensive quality of auditors and establishing a wholesome management system.The research on the auditing of related party transactions can not only improve the theory of related party auditing,improve the relevant accounting regulations and internal control of enterprises,but also strengthen the auditing force,improve the auditing procedures,effectively reduce the occurrence of fraudulent behaviors of related parties,and protect the securities market to develop orderly,safeguard the interests of the majority of small and medium shareholders.