Auditors responsibilities with regard to related parties, Auditing

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Auditors Responsibilities with regard to related parties

ISA 550 Related Parties states which the auditor should perform audit process designed to find sufficient suitable audit evidence regarding to the identification and disclosure through Management of related parties and the effect of related party transactions which are material to the financial statements. Conversely, an audit cannot be expected to finds all related party transactions.      

The Audit process can be sum up as follows:

Step 1: Recognize the related parties.

Step 2: Distribute the directory to audit staff requesting them to ensure which any transaction along with concerned parties of that they come across may be looked at carefully.

Step 3: Seek out transactions along with the related parties.


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