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
types of EDP accounting system and impact of EDP accounting controls

Counter - Indications That the auditor has found indications of going related to non-applicability does not of itself justify instantly conclusion that the entity is not a goi

General advantages and disadvantages of joint audits Advantages: All work and fees are welcome to audit firms. An opportunity to closely inspect the auditing methods

discuss the verification procedure of current assets and long term liabilties

Question : Describe the methodology and process of conducting an audit. Define audit Describe the methodology of conducting an audit  Describe the process of conduc

You have been appointed as an Internal Auditor in an organisation . As part of your duties, you are required to provide training to the staff in the internal audit division. Your f

Deferred Taxation - Audit Process Deferred Taxation results from the fact such the income tax department require different rules for calculating profits from those used throug

Government has recently set up a parastatal body responsible for waste management in Mauritius. The management is unsure as to the need for an audit and the setting up of an intern

what are the things we need to check in statutory audit of bank?

Concept of Audit Evidence The auditing is an evidence gathering exercise.  It is an exercise continued out to confirm the assertions made through the management in carrying ou