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Proposed international audit standard on related parties

  • IFAC (International Federation of Accountants) (lt gray) Image

05 Jan 2006

The International Auditing and Assurance Standards Board has released for comment a proposed revision to International Standard on Auditing (ISA) 550 Related Parties.

The current standard requires the auditor to perform certain specified procedures. The proposed standard would extend current practice by requiring the auditor to obtain an understanding of the nature and business rationale of an entity's related party relationships and transactions sufficient to identify, assess, and respond to the risks of material misstatement resulting from them. It also places greater emphasis on the difficult task for the auditor of attempting to identify related party relationships and transactions not identified or disclosed by management. The revision also places new emphasis on evaluating the effects of related party relationships and transactions on the financial statements, even in circumstances where the financial reporting framework does not establish related party accounting or disclosure requirements. Comments on the exposure draft are due by 30 April 2006. Click for:

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.