Scope of application
- This Auditing Standard specifies and guides the auditor's responsibility and auditing firms (hereinafter referred to as "auditors") Relates to related party relationships and transactions in an audit of financial statements. This Standard provides more specific guidance on Vietnamese Auditing Standards No. 315, 330 and No. 240 regarding the risks of material misstatement associated with related party relationships and transactions.
Nature of relationships and transactions with stakeholders
- Many transactions with related parties are common business transactions. In this case, related party transactions may contain no higher risk of material misstatement of the financial statements than similar transactions with unrelated parties. However, in some cases, the nature of related party relationships and transactions may result in a higher risk of material misstatement of the financial statements than for transactions with related parties. unrelated party. For example:
Stakeholders can operate through complex relationships and organizational structures that increase the complexity of transactions with related parties;
Information systems may be ineffective in identifying or summarizing outstanding transactions and balances between an entity and related parties;
Related party transactions may not be possible under normal market terms and conditions, for example, some related party transactions may be made without exchange of benefit of economic.
See full text Auditing Standard No. 550
