Define what constitutes a related party

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Reference no: EM133098492

Question - Convoluted Ltd is a company dealing in rare metals internationally. It has 40 employees (25 in the UK). It is owned by Joe King Ltd, a company registered in the Cayman Islands and is known to deal with several other UK and overseas companies also owned by that company. The company has four directors who are all UK residents and who do not own any shares in the company.

The company has a pension scheme with employee and employer trustees and is heavily indebted to its bankers. The auditors are Sew & Sew, who are newly appointed.

Required -

a. Define what constitutes a "related party".

b. List five possible parties of Convoluted Ltd.

c. From the auditor's point of view list four likely related party issues Convoluted Ltd may not disclosed.

d. List ten audit procedures Sew & Sew should carried out to ascertain related party transactions in Convoluted Limited.

Reference no: EM133098492

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