Course Introduction
The Audit of Related Parties and Connected Transactions Training Course provides a practical and comprehensive framework for identifying related parties, understanding connected relationships, assessing associated audit risks, and examining transactions involving related entities and individuals. The program equips auditors with practical techniques for detecting relationships that may not be immediately apparent from conventional accounting records.
The course examines how related-party relationships can affect financial statements, transaction terms, governance, internal controls, and audit risk. Participants will learn how to identify related parties through organizational structures, ownership information, management records, declarations, contracts, minutes, registers, and other sources of evidence, while maintaining professional skepticism toward incomplete or inconsistent disclosures.
Particular emphasis is placed on auditing connected transactions, including sales, purchases, loans, guarantees, management fees, asset transfers, leases, service arrangements, financing, and other transactions that may involve unusual terms or conditions. Participants will learn how to evaluate whether transactions are properly authorized, accurately recorded, supported by evidence, appropriately valued, and adequately disclosed in the financial statements.
The program addresses significant fraud and financial reporting risks associated with undisclosed relationships, management override, preferential pricing, non-commercial arrangements, concealed ownership, circular transactions, and inappropriate transfers of assets or liabilities. Participants will develop procedures for identifying unusual transaction patterns and investigating circumstances where management representations conflict with independent audit evidence.
Modern related-party auditing increasingly relies on data analytics and relationship mapping. The course therefore explores techniques for analyzing vendor and customer master data, ownership records, employee information, bank accounts, addresses, contact details, transaction networks, journal entries, and other data sources. Participants will also examine digital evidence, artificial intelligence, automated relationship detection, cybersecurity, and data privacy considerations.
Through integrated case studies, participants will apply a complete related-party audit methodology from planning and risk assessment through identification, substantive testing, disclosure evaluation, evidence documentation, and reporting. The course emphasizes practical judgment, corroborative evidence, effective communication with management and those charged with governance, and the development of defensible audit conclusions.
Duration
5 days
Who Should Attend
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External auditors responsible for auditing related-party relationships and connected transactions.
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Audit partners and engagement leaders overseeing significant related-party risks and financial reporting matters.
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Audit managers and supervisors reviewing related-party audit procedures and disclosure conclusions.
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Audit seniors and associates performing transaction testing and relationship identification procedures.
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Internal auditors assessing related-party controls, governance arrangements, and conflicts of interest.
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Financial controllers responsible for related-party accounting and financial statement disclosures.
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Chief financial officers and finance managers involved in related-party transaction governance and reporting.
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Accountants responsible for maintaining related-party registers, reconciliations, and supporting documentation.
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Audit quality and technical accounting professionals reviewing complex related-party reporting matters.
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Forensic auditors investigating concealed relationships, unusual transactions, and potential financial misconduct.
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Risk and compliance professionals assessing conflicts of interest and connected-party risks.
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Audit committee and governance professionals overseeing related-party transactions and management disclosures.
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Public-sector auditors examining connected entities, officials, suppliers, contractors, and related financial arrangements.
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Data analysts supporting relationship mapping, transaction analytics, and unusual-activity detection.
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Finance and audit professionals seeking advanced practical expertise in related-party auditing.
Course Objectives
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Develop practical techniques for identifying related parties and connected relationships using accounting, governance, ownership, and external information sources.
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Assess the risks that related-party relationships and transactions create for financial reporting, fraud, management override, and audit evidence.
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Evaluate whether related-party transactions are properly authorized, recorded, supported, measured, classified, and disclosed in the financial statements.
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Apply substantive audit procedures to sales, purchases, loans, guarantees, asset transfers, leases, management fees, and other connected transactions.
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Detect potentially undisclosed related parties by analyzing ownership structures, management relationships, addresses, bank details, transaction patterns, and external information.
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Evaluate whether transaction terms are unusual, preferential, non-commercial, inconsistent with market conditions, or indicative of potential financial reporting manipulation.
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Apply professional skepticism when management representations, related-party declarations, accounting records, and independent evidence produce inconsistent results.
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Use data analytics and relationship-mapping techniques to identify hidden connections and unusual transaction networks across large financial populations.
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Assess related-party financial statement disclosures for completeness, accuracy, classification, transparency, and consistency with underlying audit evidence.
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Prepare high-quality audit documentation and reporting conclusions addressing related-party risks, identified exceptions, control weaknesses, and potential financial statement implications.
Comprehensive Course Outline
Module 1: Related Parties and Connected Transactions Audit Fundamentals
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Understanding related-party relationships, connected transactions, associated risks, and their significance in financial statement auditing.
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Examining how ownership, management, family, control, influence, common interests, and contractual arrangements can create related-party relationships.
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Linking related-party risks to financial statement assertions, fraud risk, management override, financial reporting quality, and audit strategy.
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Establishing a risk-based audit approach for identifying, testing, evaluating, and reporting related-party transactions.
Module 2: Identifying Related Parties and Connected Relationships
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Reviewing organizational charts, ownership records, shareholder information, governance documents, management declarations, and related-party registers.
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Identifying relationships involving directors, senior management, significant owners, subsidiaries, associates, joint arrangements, and other connected entities.
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Using external information, public records, corporate databases, contracts, correspondence, and other sources to corroborate relationship information.
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Evaluating incomplete, outdated, contradictory, or potentially misleading related-party information provided by management.
Module 3: Related-Party Risk Assessment and Audit Planning
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Assessing the likelihood and significance of related-party transactions based on entity structure, industry characteristics, ownership, governance, and transaction complexity.
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Identifying high-risk related-party arrangements involving financing, asset transfers, unusual pricing, guarantees, and significant non-routine transactions.
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Developing audit procedures responsive to risks of undisclosed relationships, management override, fraudulent transactions, and inappropriate financial reporting.
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Integrating related-party considerations into audit planning, materiality assessment, fraud risk assessment, and overall audit strategy.
Module 4: Auditing Related-Party Sales, Purchases, and Operating Transactions
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Testing sales and purchases involving related parties for authorization, occurrence, completeness, accuracy, pricing, delivery, and appropriate accounting treatment.
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Comparing related-party transaction terms with contracts, market information, comparable transactions, and independent evidence where appropriate.
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Investigating unusual discounts, preferential pricing, extended payment terms, side agreements, unusual returns, and non-standard commercial arrangements.
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Evaluating whether related-party transactions create revenue recognition, expense recognition, valuation, cut-off, or classification risks.
Module 5: Loans, Guarantees, Financing, and Complex Arrangements
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Auditing related-party loans, advances, guarantees, security arrangements, interest-free financing, and other financial relationships.
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Evaluating loan agreements, repayment terms, interest rates, collateral, guarantees, impairment considerations, and financial statement classification.
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Identifying financing arrangements that may conceal liabilities, transfer economic benefits, manipulate earnings, or circumvent established approval controls.
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Confirming related-party financing information and reconciling external evidence with accounting records, contracts, and financial statement disclosures.
Module 6: Undisclosed Related Parties, Fraud, and Management Override
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Identifying indicators of undisclosed related parties, concealed ownership, nominee arrangements, common addresses, shared bank accounts, and unusual transaction relationships.
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Investigating management override risks involving related-party transactions, journal entries, unusual approvals, and transactions outside normal business processes.
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Analyzing circular transactions, reciprocal arrangements, asset transfers, unusual settlements, and transactions lacking clear commercial substance.
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Applying professional skepticism and corroborative procedures when management representations conflict with independent evidence or transaction patterns.
Module 7: Data Analytics and Relationship Mapping
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Using data analytics to identify common addresses, telephone numbers, bank accounts, tax identifiers, directors, owners, employees, and other relationship indicators.
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Applying network and relationship analysis to map transaction flows among customers, suppliers, employees, subsidiaries, affiliates, and other connected entities.
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Using automated exception testing to identify unusual transaction values, round amounts, recurring transfers, unusual timing, and non-standard transaction patterns.
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Evaluating the use of artificial intelligence and machine learning for relationship detection while addressing data quality, explainability, privacy, and professional judgment risks.
Module 8: Evidence, Confirmations, and Substantive Testing
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Designing audit procedures that obtain sufficient and appropriate evidence concerning the existence, terms, authorization, purpose, and financial impact of related-party transactions.
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Using confirmations, contracts, invoices, board minutes, correspondence, bank records, external documentation, and independent evidence to validate connected transactions.
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Reconciling related-party balances and transactions to general ledgers, subledgers, confirmations, supporting schedules, and financial statement disclosures.
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Evaluating conflicting evidence and documenting the procedures performed to resolve discrepancies, unexplained relationships, and potentially significant exceptions.
Module 9: Related-Party Disclosures, Governance, and Reporting
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Evaluating the completeness and accuracy of related-party disclosures and their consistency with identified relationships and audited transaction populations.
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Assessing whether significant relationships, transaction amounts, outstanding balances, commitments, and other relevant information are appropriately presented and disclosed.
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Communicating significant related-party findings, control deficiencies, undisclosed relationships, and potential financial reporting issues to those charged with governance.
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Determining whether identified related-party issues require financial statement adjustments, expanded disclosures, additional audit procedures, or other reporting considerations.
Module 10: Integrated Related-Party Audit Case Studies
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Performing an end-to-end audit of a company with complex ownership structures, management relationships, related entities, and significant connected transactions.
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Investigating cases involving concealed suppliers, preferential sales, related-party loans, asset transfers, guarantees, unusual payments, and incomplete disclosures.
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Applying data analytics and relationship mapping to identify previously undisclosed relationships and connect transaction populations to relevant parties.
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Preparing audit findings, evidence matrices, management communications, disclosure recommendations, and final conclusions concerning related-party risks and transactions.
Training Approach
This course will be delivered by our skilled trainers who have vast knowledge and experience as expert professionals in the fields. The course is taught in English and through a mix of theory, practical activities, group discussion and case studies. Course manuals and additional training materials will be provided to the participants upon completion of the training.
Tailor-Made Course
This course can also be tailor-made to meet organization requirement. For further inquiries, please contact us on: Email: training@upskilldevelopment.com Tel: +254 721 331 808
Training Venue
The training will be held at our Upskill Training Centre. We also offer training for a group (at a discount of 10% to 50%) at requested location all over the world. The Onsite course fee covers the course tuition, training materials, two break refreshments, buffet lunch, airport transfers, Upskill gift package, and guided tour.
Visa application, travel expenses, dinners, accommodation, insurance, and other personal expenses are catered by the participant
Certification
Participants will be issued with Upskill certificate upon completion of this course.
Airport Pickup and Accommodation
Airport pickup and accommodation is arranged upon request. For booking contact our Training Coordinator through Email: training@upskilldevelopment.com, +254 721 331 808
Terms of Payment:
Unless otherwise agreed between the two parties’ payment of the course fee should be done 3 working days before commencement of the training so as to enable us to prepare better.
