Audit Research On The Illegal Occupation Of Fund By Major Shareholders Through Related Parties

In the past two years,affected by the epidemic and the increasingly tense trade relations between China and the United States,China’s economic market competition is becoming more and more intense.In order to survive in the market,many listed companies tend to expand their scale through mergers,joint ventures and other forms.With the expansion of enterprise scale,the frequency of related transactions in listed companies is getting higher and higher.While related transactions can bring better opportunities and higher benefits to the business,they also facilitate fraud.At the same time,many major shareholders of listed companies,in order to meet their own personal self-interest,will illegally occupy the company’s funds through non-fair related transactions.The characteristics of related transactions themselves are complex and hidden,coupled with the overall regulatory environment is not strict enough,many listed companies’ controlling shareholders can easily occupy the company’s funds through non-operating transactions of non-fair related transactions,not only harm the rights and interests of the relevant stakeholders of the company,but also destroy the fair competition market environment.The controlling shareholder occupies the company’s funds illegally through the non-fair related transaction,and it is difficult for the CPA to find this hidden fraud means in the audit,so the illegal occupation of funds by the major shareholders presents a new challenge to the audit work.This paper selects the case of the illegal occupation of the company’s funds by the new controlling shareholders of Kand through related transactions,takes the audit process of the new capital occupation of The New Fund of The Swiss Accounting Firm(hereinafter referred to as Ruihua Institute)as the research object,and discusses the methods of optimizing the audit work according to the relevant theories.Kand’s new fraud case is a representative case in recent years,Kang Dexin as a "white horse stock",its fraud is China’s securities market a large amount of fraud cases,its long fraud time,the amount of fraud is huge,large shareholders regular non-operating occupation of company funds,resulting in its very bad nature.Similarly,as one of the well-known professional accounting firms in China,Ruihua has a certain position and influence in the industry,but in recent years has been frequently punished by the CSRC.The article intends to analyze Ruihua’s audit process,summarize its problems in the audit process,and analyze the causes of the problems,sum up more experience for such practices,provide more reference,and reduce the occurrence of such large shareholders illegally occupying funds.On the basis of reading a large number of literatures,this paper analyzes the risk assessment procedure and coping methods for major shareholders to use the illegal occupation of funds by related party transactions,and finally puts forward some specific opinions from the optimization of audit methods and the improvement of CPA’s own practice ability.