Related Parties Flashcards
What are related parties
A related party is a person or an entity that is related to the reporting entity
A person or close member of that persons family is related to a reporting entity if a person has control, joint control, or significant influence over the entity or as a member of the key management proposal.
An entity is related to a reporting entity if, among other circumstances, it is a parent, subsidiary, associates, Or joint-venture of reporting entity, or it is controlled, or significantly influenced by a person who is related party
What are the auditors procedures regarding related parties
Enquire from management about related party transactions. Auditors would have to explain the concept and give examples to help management
Review last years working papers
Review the board minutes
Reviewed accounting records for unusual transactions
Review bank certificates
Review principal shareholders are companies with her in the client trades
Ask the directors about their Other directors and shit ownerships
Review correspondence with lawyers
Obtain written representation from management
What are the disclosure is required in the financial statements regarding related parties
Related parties between parents and subsidiaries irrespective of whether they have been transactions between the parties in line
Compensation to key management personnel
Minimal disclosures for related party transactions
