Types of transaction - related party, Auditing

Types of Transaction - Related Party

Fundamentally two types of transactions which arise between a related party and a company as:

A. It is usual for members of a collection to trade along with each other. Those entered in the ordinary course of business. 

B. Those not engaged in the ordinary course of business or that may include misleading presentation of the accounts or fake on the company, its creditors or members.

Type (a) commonly deserves no individual audit attention.  However the auditor must ensure which they in realty arise in of business at arm's length in the ordinary course.

Type (b) is whether problems may arise and whether scandals have occurred.

The Companies Act prohibits loans to directors and where they happens utilizes full disclosure.  The law not allows for the giving of financial assistance about the purchase of or subscription for a company's own shares.  The rights of directors the law restricts to acquire non-cash assets from the company or about the company to attain non-cash assets from its directors.  Significant shareholding of more than 5% must be notified into the company within seven days.

Posted Date: 1/24/2013 8:03:03 AM | Location : United States







Related Discussions:- Types of transaction - related party, Assignment Help, Ask Question on Types of transaction - related party, Get Answer, Expert's Help, Types of transaction - related party Discussions

Write discussion on Types of transaction - related party
Your posts are moderated
Related Questions
IAS 36 Impairment of Assets It is very necessary for the auditor to determine the client's method for determining and accounting for impairments.  Corresponding IAS 36, 'impai

Techniques of obtaining evidence ISA 500 mentions them as: (a) Inspection of records or documents, (b) Inspection of tangible assets, (c) Observation, (d) Inquiry, (e) C

Financial Statements Rely All Financial providers people must be sure that the financial statements can be relied upon. It should be noted that: 1. The auditor himself must be

Problem: You are an auditor of a company which operates three large departmental stores at Grand Bay, Port Louis and Tamarin. You are preparing your audit plan and you are p

Internal Control - Investment Whether a trading concern holds merely a few investments, there is unlikely to be any organized internal control systems particularly for those i

Procedures in computing the work of the expert The auditor must obtain reasonable assurance that the expert's work constitutes appropriate audit evidence in support of the fina

Fitri, a sole proprietor in pulic practice, plans to establish a separate department that will provide internal audit service to his audit clients.

Fairness -  Auditing The word fair can have the following meanings:  on the other hand clear, plain and distinct and on the one impartial, equitable and simple.  When fair is

Banks The Authoritative documents are: The Central Bank of Kenya Act, The Companies Act Cap 486. IAS 30 Disclosure in the Financial statements of Banks and Similar

Sufficiency - Sources of evidence The audit evidence should in total enable the auditor to form an opinion on the financial statements.  Sufficiency is a measure of evidence o