Course Introduction
Related-Party Transactions Auditing Training Course provides a comprehensive and practical framework for identifying, assessing, testing, and reporting transactions and relationships involving related parties. The course examines the accounting, governance, internal control, and audit implications of related-party arrangements and equips participants with techniques for detecting transactions that may create heightened financial reporting and fraud risks.
The program focuses on the challenges auditors face when related-party relationships are complex, undisclosed, informal, or structured through multiple entities and individuals. Participants learn how to identify related parties through organizational charts, ownership records, board documentation, management inquiries, transaction patterns, and other audit evidence while maintaining professional skepticism throughout the audit process.
Participants will explore the audit risks associated with transactions that are outside the normal course of business, conducted on unusual terms, supported by inadequate documentation, or influenced by senior management and connected individuals. Practical approaches are provided for evaluating the business rationale, authorization, completeness, occurrence, accuracy, classification, valuation, and disclosure of related-party transactions.
The course also addresses the relationship between related-party transactions, management override, conflicts of interest, fraud risks, earnings management, and financial statement misstatement. Participants will develop structured audit procedures for examining purchases, sales, loans, guarantees, management fees, asset transfers, leases, financing arrangements, and other transactions involving directors, shareholders, executives, subsidiaries, associates, joint ventures, and connected entities.
Special emphasis is placed on obtaining sufficient and appropriate audit evidence. The course explains how auditors can use confirmations, contracts, board minutes, legal correspondence, accounting records, bank information, ownership documentation, external databases, analytical procedures, and subsequent-event reviews to identify undisclosed relationships and evaluate the completeness of management's disclosures.
Through practical case studies, audit scenarios, working-paper exercises, and risk-based testing approaches, Related-Party Transactions Auditing Training Course helps participants strengthen their ability to challenge management representations, recognize unusual transaction patterns, document audit conclusions, and communicate significant findings. The program is designed to support consistent, defensible, and professionally rigorous related-party audit work.
Duration
5 days
Who Should Attend
-
External auditors responsible for auditing related-party transactions and financial statement disclosures.
-
Internal auditors reviewing conflicts of interest, connected-party activities, and governance controls.
-
Audit managers and supervisors responsible for planning and reviewing related-party audit procedures.
-
Finance managers involved in identifying, recording, reconciling, and reporting related-party transactions.
-
Financial controllers responsible for related-party balances, disclosures, and reporting processes.
-
Chief accountants responsible for maintaining accurate accounting records for connected transactions.
-
Risk and compliance professionals assessing related-party risks and governance requirements.
-
Corporate governance professionals reviewing transactions involving directors, shareholders, and senior management.
-
Audit committee members seeking stronger oversight of related-party transactions and disclosures.
-
Forensic auditors investigating suspicious, concealed, or unusual transactions involving connected parties.
-
Fraud risk professionals evaluating related-party transactions as potential indicators of management override.
-
Accounting professionals responsible for financial reporting and related-party disclosure processes.
-
Legal and compliance personnel supporting reviews of related-party arrangements and conflicts of interest.
-
Investment and corporate finance professionals involved in transactions between affiliated entities.
-
Professionals seeking practical skills in risk assessment, substantive testing, evidence evaluation, and audit documentation.
Course Objectives
-
Develop a comprehensive understanding of related-party relationships, transactions, balances, disclosures, and the audit risks associated with connected parties.
-
Identify related parties effectively by analyzing ownership structures, management relationships, governance records, group structures, and unusual transaction patterns.
-
Assess the risk of material misstatement arising from related-party transactions, including risks involving fraud, management override, conflicts of interest, and incomplete disclosure.
-
Design risk-based audit procedures for testing the occurrence, completeness, accuracy, classification, valuation, authorization, and disclosure of related-party transactions.
-
Evaluate whether related-party transactions have a genuine business rationale and whether their terms and conditions are appropriately supported by reliable evidence.
-
Apply effective procedures for identifying undisclosed related-party relationships through inquiries, confirmations, document inspection, analytical procedures, and external evidence.
-
Examine related-party balances, loans, guarantees, asset transfers, sales, purchases, leases, management fees, and financing arrangements using appropriate substantive procedures.
-
Strengthen professional skepticism when evaluating management representations and explanations concerning unusual transactions and relationships with connected parties.
-
Prepare high-quality audit documentation that clearly links identified risks, audit procedures, evidence obtained, findings, conclusions, and required financial statement disclosures.
-
Improve the ability to communicate significant related-party audit findings to management, those charged with governance, audit committees, and other relevant stakeholders.
Comprehensive Course Outline
Module 1: Related-Party Transactions Audit Fundamentals
-
Understanding the nature, characteristics, and financial reporting implications of related-party relationships and transactions.
-
Distinguishing ordinary-course transactions from unusual arrangements requiring enhanced audit attention.
-
Understanding audit assertions, materiality, inherent risk, control risk, and detection risk in related-party auditing.
-
Establishing professional skepticism and a risk-based audit approach for related-party transaction testing.
Module 2: Identifying Related Parties and Relationships
-
Mapping ownership structures, subsidiaries, associates, joint ventures, directors, executives, and significant shareholders.
-
Reviewing corporate records, organizational charts, governance documents, and management information to identify relationships.
-
Using inquiries, declarations, confirmations, and external information to identify previously undisclosed related parties.
-
Assessing complex group structures, nominee arrangements, common ownership, and indirect relationships between entities.
Module 3: Related-Party Risk Assessment and Audit Planning
-
Identifying financial statement risks arising from related-party transactions, balances, commitments, and disclosures.
-
Evaluating the risk of management override, fraud, earnings manipulation, conflicts of interest, and inappropriate transactions.
-
Establishing materiality, performance materiality, risk thresholds, and audit responses for related-party exposures.
-
Developing detailed audit planning procedures that address identified related-party risks and unusual transaction activity.
Module 4: Internal Controls Over Related-Party Transactions
-
Evaluating policies and procedures governing related-party identification, approval, recording, monitoring, and disclosure.
-
Assessing segregation of duties, authorization controls, conflict-of-interest declarations, and governance oversight mechanisms.
-
Reviewing controls over related-party master data, transaction coding, account reconciliation, and financial reporting processes.
-
Testing management's controls for detecting, escalating, documenting, and approving transactions involving connected parties.
Module 5: Substantive Audit Procedures for Related-Party Transactions
-
Testing sales, purchases, expenses, services, management fees, asset transfers, and other related-party transactions.
-
Examining contracts, invoices, correspondence, payment records, accounting entries, and supporting documentation for transaction validity.
-
Performing confirmations and alternative procedures for related-party balances, loans, receivables, payables, and financing arrangements.
-
Applying analytical procedures and transaction-level testing to identify unusual volumes, pricing, timing, or accounting patterns.
Module 6: Loans, Guarantees, Financing, and Complex Arrangements
-
Auditing related-party loans, advances, guarantees, collateral arrangements, and other financing transactions.
-
Evaluating interest rates, repayment terms, security arrangements, maturity dates, and evidence supporting the commercial rationale.
-
Reviewing related-party leases, financing structures, asset transfers, and other transactions requiring significant professional judgment.
-
Assessing the accounting classification, measurement, recoverability, and disclosure of complex related-party balances.
Module 7: Undisclosed Transactions, Fraud Risks, and Management Override
-
Identifying warning signs of concealed related parties, undisclosed transactions, circular transactions, and unusual financial arrangements.
-
Investigating transactions involving senior management, directors, shareholders, family relationships, and connected businesses.
-
Linking related-party transaction risks with management override, fraudulent reporting, asset diversion, and conflicts of interest.
-
Applying investigative audit procedures when documentation, explanations, or transaction patterns indicate elevated fraud risk.
Module 8: Evidence, Confirmations, and Analytical Techniques
-
Evaluating the reliability, relevance, sufficiency, and appropriateness of evidence supporting related-party transactions.
-
Using external confirmations, legal correspondence, bank information, corporate records, and independent documentation effectively.
-
Applying data analytics to identify unusual counterparties, duplicate payments, round-number transactions, unusual pricing, and unexpected balances.
-
Reconciling related-party listings with the general ledger, subledgers, contracts, board minutes, and disclosure schedules.
Module 9: Financial Statement Presentation and Related-Party Disclosures
-
Reviewing the completeness, accuracy, classification, and transparency of related-party disclosures in financial statements.
-
Assessing whether relationships, transaction amounts, outstanding balances, commitments, and relevant terms are appropriately presented.
-
Evaluating consistency between accounting records, audit evidence, management representations, and related-party disclosure notes.
-
Identifying disclosure omissions, inconsistent descriptions, unexplained balances, and other indicators requiring further audit investigation.
Module 10: Audit Completion, Reporting, and Practical Case Studies
-
Performing final related-party transaction reviews and evaluating whether identified risks have been appropriately addressed.
-
Documenting findings, control deficiencies, misstatements, unresolved matters, and conclusions in audit working papers.
-
Communicating significant related-party findings to management and those charged with governance through clear and evidence-based reporting.
-
Applying practical case studies involving concealed relationships, unusual transactions, incomplete disclosures, and suspected management override.
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.
