Related Party Transactions

Question 1

Auditor’s responsibility

Answer 1

Alert for existence of transactions of related parties

Make sure it’s properly disclosed according to GAAP

Question 2

Procedures

Answer 2

1) Evaluation of company procedures to identify/account for related party transactions
2) Inquire management
3) Review company filings concerning officers/directors who occupy management/director positions elsewhere
4) Review of material transactions for related party evidence (near the end of the year)