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Related Party Form for Audit

Gurmet Siingh (Chartered Accountant) (413 Points)

18 June 2009

Hi,

Can Someone pls. tell me which form is to use for Related party transactions?

I m doing Statutory Audit in a Private Company but don't know which Form to ask from the clent for details of Related party.

Thx pls. reply soon.

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2 Replies

Sanjeev Jain (Chartered Accountant) (922 Points)
Replied 22 June 2009

Hie,

There are several books are required to be kept by the company besides its normal books which are called Statutory Books. and if you wanna 9 and verify the transaction entered between the parties you have to ask for the register maintained u/s 301 of the companies Act under whcih co is required to record all the transactions which are related party Transactions.

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Amol Gopal Kabra (CA,CS,DISA) (Practicing CA) (8539 Points)
Replied 24 June 2009

First of all take list of the related parties from the client. Classify them in the criteria given in the AS-18.

Now when you have the list with you, check ledgers of the same in the books of accounts for the transactions with them.

Further, when the transactions have not been recorded in the ledgers, i mean to say in case where the transactions are done in cash / bank, (in case of purchases, sales, expenses, etc.,) scrutinise these ledgers to find out any related party transactions.

However, the preparation of the schedule of related parties is of the management. The auditors responsibility is to verify the correctness of the same. The same you can verify using the above mentioned procedure.