Page 118 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
6. Perform SAP: Perform appropriate substantive audit procedures relating to the newly identified related
parties or significant related party transactions.

(CNO-SA550.100) Transactions Outside the Entity's Normal Course Of Business
Shortcut CO to LLC
2
Complex Equity Transactions: Complex equity transactions, such as corporate restructurings or acquisitions.
Offshore Entities: Transactions with offshore entities in jurisdictions with weak corporate laws.
Leasing Without Consideration: The leasing of premises or rendering of management services to another
party if no consideration is exchanged.
Large Discounts or Returns: Sales transactions with unusually large discounts or returns.
Circular Arrangement: Transactions with circular arrangements, such as sales with a commitment to
repurchase.
Change in Terms: Transactions under contracts whose terms are changed before expiry.

(CNO-SA550.120) Audit Procedures for SRPT Outside Normal Course of Business (Significant Risk)
Audit Procedures for SRPT
(Shortcut: AIR in Accounting)
Authorization: Obtain evidence that transactions have been properly authorized and approved.
Inspection: Review underlying contracts or agreements.
Rationale: Assess if the business rationale suggests potential fraudulent reporting or asset misappropriation.
Ensure transaction terms align with management's explanations.
Accounting: Confirm transactions are correctly accounted for and disclosed per the relevant financial
framework.

(CNO-SA550.140) Other Important Points
The auditor shall obtain Written Representation that:
a) all the related parties and related party transactions have been disclosed to the auditor and
b) all such transactions have been properly accounted for and disclosed.
Communication with TCWG
The auditor shall communicate with TCWG significant matters arising during the audit in connection with
the entity's related parties.
Documentation:
The auditor shall include in audit documentation names of the related parties and the nature of the related
party transactions.

NOTE: As per Our past experience Concepts & Questions given in main ICAI Module are extremely important
& there are high chances that whole paper will come from here, so we have restricted only SM based content in
Chapters. Further extra content of SA’s given in Index or where module coverage is not adequate is given at the
end as a separate Chapter. So that students can deal with such content separately with different strategy.

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