Identification of False Revenue in E-commerce Sales Channels of Manufacturing Enterprises: Company A’s Case Study

More and more manufacturing companies have seized the opportunity of the vigorous development of the capital market and successfully go public in recent years, especially in countries which focuses on manufacturing. In order to meet the listing standards, some manufacturing companies engage in illegal transactions to inflate the revenue, covering by the new retail business model. This has brought great challenges to accounting firms and other institutions. As a new sales channel of manufacturing companies, e-commerce has generally become an important part of revenue in manufacturing companies and bring new economic growth points. Due to the complexity of the e-commerce transaction structure and business data, it is necessary to conduct targeted research on the false revenue of e-commerce channels for manufacturing companies in order to identify the related risks, promote the capital market’s health and sustain its development.This article conducts a study on the identification of systematic false revenue from e-commerce channels of Company A through literature research and case study method. Firstly, by collecting and organizing the related literature, it explains the background and significance of the study. It also explains the relevant concepts and theories. Then, the article gives a brief introduction of the case Company A, a brief review of Company A's false revenue situation, and a deep analysis of several audit procedures performed by the auditing firm on Company A. The article points out the shortcomings of the audit procedures and provides the suggestions. Finally, to improve the auditing technology, the author provides four suggestions based on his experience and case study, which includes improving data analysis ability, enhancing data modeling ability, improving audit sampling methods, and technical practices of Grant Thornton. In the future, through the improvement of auditing technology and the enhancement of auditor’s ability, full-sample auditing will become normal.