Research Of Internal Control Of Related Party Transactions On The Case Of Dengyun Co.,Ltd.

In recent years,there are numerous cases in which listed companies have inflated profits and whitewashed statements through unfair related party transactions.Although the China Securities Regulatory Commission was heavily punished those companies,there are still many other companies use this method.The most fundamental reason is the weak internal control on related party transactions.After years of development,China's capital market has begun to take shape in terms of the total amount of transactions and the number of listed companies.However,internal control of related party transactions are still not perfect and need further improvement.This paper mainly uses case analysis method,taking Huaiji Dengyun Auto-Parts?Holdings?Co.,Ltd.of Guangdong Province as an example.Based on the related theories of related parties and internal control,the author analyzes the internal control system of the company's related party transactions and its implementation,finds out the problems,analyzes the reasons,and finally makes recommendations.Dengyun Company was officially listed on the small and medium-sized board of the Shenzhen Stock Exchange on February 19^th,2014.It was investigated by the Securities and Futures Commission in the year of listing due to a 44.98%drop in profits.The author chose Dengyun as a case because it is a typical company.On the one hand,it is a joint-stock company restructured from a veteran state-owned enterprise;on the other hand,the company's related party relationship is very hidden,and the person involved use multiple holding methods to hide affiliates.Based on the two reasons above,the author believes that Dengyun Company as a case can add luster to the research of internal control of related party transactions.The author has used books,magazines and other media to collect some research results of domestic and foreign scholars on internal control,related party transactions and internal control of related party transactions as the theoretical basis of this paper.This paper first introduces the research background and research significance,as well as literature review.Then the related theory of internal control is expounded.Secondly,this paper introduces the related party transactions of Huaiji Dengyun Auto Parts Co.,Ltd.,and introduces in detail the related parties disclosed by the company and related parties that are not disclosed according to regulations.Thirdly,based on the above theory and case introduction,the author puts forward some targeted suggestions on the internal control of the company's related party transactions.Finally,it is the summary and recommendations of the full text.