On The Audit Of Related Party Funds Occupation Of Huaze Cobalt&nickel

Since the world economy has not fully recovered from the gloom of the financial crisis,the trade conflict between China and the United States has intensified and even evolved into a trade war,both domestic and foreign economies are facing downward pressure.Many companies have responded to the fierce market competition pressure.The mergers and acquisitions are often used to expand the competitive advantage.As a result,the relationship between related parties is becoming more complicated.The frauds related to related parties and related party transactions are also more serious,which also greatly increase the risk of accounting firms’ auditing of related parties’ funds.Therefore,it is necessary to study the funds occupation audit of related parties through specific case studies.This paper adopts the case study method,taking Ruihua Certified Public Accountants’ auditing of Chengdu Huaze Cobalt&nickel Materials Co.,Ltd.for three years after its listing as an example.It studies the related party’s fund occupation and its audit.Firstly,by studying the facts of the funds occupation of Huaze Cobalt&nickel related parties,this paper finds that the motivation of the related party’s capital occupation is mainly for the related company of the controlling shareholder to get rid of the financial dilemma.So the controlling shareholder makes a falsehood by concealing related parties,fictitious contracts and bills.And the means of non-compliance guarantees and other means to implement the capital occupation of the listed company by the related parties.The result not only harms the interests of the small and medium shareholders,but also jeopardizes the development of the securities market.Secondly,from the two aspects of risk assessment and risk response,it analyzes the procedures and results of Ruihua Certified Public Accountants’ audit of the funds occupation of Huaze Cobalt&nickel related parties.Thirdly,the main reasons for the audit failures from the aspects of CPAs and accounting firms include: CPAs didn’t identify hidden related party relationships,lack of necessary cautiousness for abnormal bill transactions,and didn’t audit internal controleffectively.The auditor lacks the audit experience of the related party’s capital occupation,and the accountant’s affairs control the audit quality is not strict and the audited unit concealed deliberately.Finally,after an in-depth analysis of the funds occupation audit of related parties,this paper proposes a series of audit countermeasures and suggestions.Based on the study of the funds occupation audit of Huaze Cobalt&nickel related parties,this paper puts forward some suggestions on the audit of the funds occupation of related parties on the basis of considering the feasibility and necessity: on the one hand,it should supervise the audited unit to improve internal control;The CPAs should investigate the shareholding structure of the audited entity thoroughly,maintain the vigilance of abnormal bill acceptance and large-value guarantees,and focus on the internal control of the audited unit’s capital business.CPAs should also maintain professional skepticism throughout the audit process and improve their professional competence.The accounting firm must control the quality of the audit business strictly and form a scientific and effective fund-raising audit process for related parties.The possible innovations of this paper are that there are relatively few special studies on the audit of funds occupation of related parties in the current academic.This paper straightens out the related theory of funds occupation of related parties and the audit of funds occupation of related parties,which has completed China’s audit theory system;At the same time,this paper selects a representative case of funds occupation of related parties,which can be used as a typical role to provide a reference case study for strengthening the funds occupation control and audit practice of related parties.