Related Parties’ Transactions: A Literature Overview on Auditor’s Risk

• Main Authors: Lioara-Veronica Pasc, Camelia-Daniela Hațegan
• Format: Article
• Language: English
• Published: Ovidius University Press 2020-01-01
• Series: Ovidius University Annals: Economic Sciences Series
• Subjects: transactions; related parties; auditor; risk; transfer pricing
• Online Access: https://stec.univ-ovidius.ro/html/anale/RO/wp-content/uploads/2021/03/Section%205/32.pdf

The aim of this paper is to examine the nature of related party transactions, how they are reflected in the context of a financial audit and the challenges of resolving risk management issues, detecting fraud and the effects of coordinating these transactions by company management between two or more affiliated companies. To achieve the objective, the research methodology is qualitative and is based on the selection of a sample of relevant articles from journals indexed in the international database in which the risks identified in transactions with related parties were highlighted. The research results show the main risks identified were fraud risk, risk of misstatements and the company value manipulation risk. In conclusion, it can be stated that there are additional factors in the audit of related party transactions that the auditor must take into account so that there is no impact on the correctness and accuracy of the results of the final audit report.