Related parties, fraud & transactions not at arm’s length

Overview:

In ISA 240 fraud is defined as an intentional act by one or more individuals among management, those charged with governance, employees, or third parties, involving the use of deception to obtain an unjust or illegal advantage. It is clear from this definition that fraud can be perpetrated not only by management and those charged with governance, but also employees and other third parties.

In many instances, transactions with related parties occur outside the normal course of business, which increases the risk of transactions not being at arm’s length.  This holds a significant fraud risk, demanding an appropriate response. It is important to consider the relevant terms and conditions for related party transactions and balances with the appropriate level of scepticism to properly assess the risk, develop appropriate audit procedures in response to the risks identified, and verify whether appropriate disclosures have been made in the financial statements.

This training will give participants a practical understanding of how to approach the audit of related parties and transactions not at arm’s length with due consideration of fraud risk.

Content and outline:

To explain the following concepts and demonstrate their practical application:

• Management incentives and methods
• Transactions not at arm’s length
• Fraud risk
• Specific audit considerations

Certification:

Upon completion of the training, participants will receive a verifiable attendance certificate.