Study On Related Party Transactions Audit Failture Of Huaze Cobalt Nickel Company

With the new normal mechanism of economic development,the internal organizational structure of enterprises has become increasingly complex,and internal transactions using ownership have emerged at the historic moment,that is,related party transactions.Related party transactions are both hidden and complicated.During the audit process,the CPA will face problems such as difficult to define and difficult to identify related party relationships,which will accordingly lead to higher related party transaction audit risks.In recent years,failed audits of related party transaction have repeatedly disrupted the order of China’s capital market,while failed audits of related party transactions will adversely affect the market value and reputation of listed companies and disrupt the normal operation of the securities market.At the same time,it will also have a negative impact on the reputation of auditors and accounting firms and the entire auditing industry.Therefore,the research on the failure of related party transaction audits can contribute to the continuous strengthening and improvement of the audit industry,and can also promote the upward development of China’s market economy.This paper uses a combination of case analysis and normative research to study the failure related party transactions auditing of Huaze Cobalt Nickel Co.,Ltd.,and analyzes the misconduct of Ruihua Certified Public Accountants in the audit process,that is,the concealed related parties and their insufficient transaction identification,inadequate risk assessment,low audit quality,and no related party transaction audit procedures.It was found that Huaze Cobalt and Nickel Co.,Ltd.concealed related parties,used false notes to offset accounts receivable,and violated guarantees.This paper analyzes the audit procedures of Ruihua accounting firm,and further summarizes the performance of the audit failure of related party transactions and the reasons for the phenomenon of audit failure,and then obtains the enlightenment for the audit of related party transactions.It is proposed that the firm strengthen its business quality control,set up targeted related party transaction audit procedures,improve the review and approval procedures,and improve the independence of certified public accountants,etc.,and provide certain suggestions and references for reducing related party transaction audit failures.