Research On The Lack Of Professional Suspicion In The Audit Of Related Party Transactions And Its Countermeasures

In recent years,related party transaction fraud incidents have occurred frequently,resulting in an increasing number of audit failures,such as the audit failures of Abbott,Kangmei Pharmaceutical,Qianshan Pharmaceutical Machinery,Lanshan Technology,and Dongfang Jinyu.By reviewing the penalty announcement of the CSRC,it can be found that there is a widespread lack of professional suspicion among accounting firms in the audit of related party transactions.Auditors have not been vigilant about abnormal situations,have not implemented sufficient audit procedures,have not obtained sufficient and appropriate audit evidence,and have not discovered the fact of fraud in related party transactions,thus issuing incorrect audit opinions,leading to the failure of related party transaction audits.Therefore,studying the issue of lack of professional suspicion and its countermeasures can help improve the quality of related party transaction auditing,prevent related party transaction auditing failures,and play an important role in promoting the high-quality development of accounting firms.This paper first combs the literature on professional suspicion and related party transaction audit at home and abroad in recent years,and summarizes the existing relevant research.Then,taking Zhongxingcai Guanghua’s audit of Lanshan Technology as a case,guided by the principal-agent theory,information asymmetry theory and risk-oriented audit theory,and combined with the punishment decision issued by the CSRC,the paper analyzes and evaluates Zhongxingcai Guanghua’s audit of related party transactions of Lanshan Technology.The following problems were found: In the process of auditing transactions of related parties of Lanshan Technology,Zhongxingcai Guanghua lacked professional suspicion in many links,which led to its failure to properly assess the risk of material misstatement,effectively control the inspection risk,and reduce the Audit risk,which led to audit failure.The main reasons for the problems include: some auditors lack professional competence and are not alert to obvious abnormal information;the auditor lacks independence and trusts the audited unit excessively;the quality control of the accounting firm is not strict,and the review control is mere formality.Competition in the audit industry is fierce,and firms compete at low prices;overlapping functions of regulatory departments and lagging supervision;the external punishment is relatively light and there are fewer punishment methods.Based on the above research,this paper puts forward countermeasures and suggestions on how to strengthen and maintain professional suspicion in the audit of related party transactions.First of all,auditors themselves should strengthen their learning and practice,improve their professional knowledge level,and strengthen their sense of professional skepticism;enhance professional ethics standards,strictly follow audit standards,and maintain independence at all times.Secondly,accounting firms should strengthen various training activities for auditors’ abilities;develop incentive policies,improve review systems,and strengthen quality control.Finally,in terms of external regulatory environment,the government should standardize audit fee standards,require disclosure of relevant details,and regulate competition order;establish a unified regulatory platform to achieve dynamic regulation;record integrity records,pursue joint and several liability,and implement civil and criminal liability.