TL;DR for CAs
- Identify related parties beyond the disclosure list.
- Test arm's length and approval compliance.
- Companies Act and Ind AS/AS disclosure overlaps need reconciliation.
What it is
Related party audits evaluate completeness of identification, authorisation, and disclosure of RPTs.
Who it applies to
Auditors of companies and other entities with group/affiliate relationships.
Key provisions
- Accounting disclosure standards
- Section 188/177 approvals where applicable
- Fraud risk considerations
Practical tips for CAs
Search ledger for director-controlled entities. Match MCA filings with books.
Common mistakes
Incomplete party list; missing year-end balances; weak pricing documentation.
For general guidance only. Verify with the latest Finance Act, GST notifications, and ICAI guidance notes before advising clients.