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Related Parties’ Transactions: A Literature Overview on Auditor’s Risk

Author

Listed:
  • Lioara-Veronica Pasc

    (West University of Timisoara)

  • Camelia-Daniela HaÈ›egan

    (West University of Timisoara)

Abstract

The aim of this paper is to examine the nature of related party transactions, how they are reflected in the context of a financial audit and the challenges of resolving risk management issues, detecting fraud and the effects of coordinating these transactions by company management between two or more affiliated companies. To achieve the objective, the research methodology is qualitative and is based on the selection of a sample of relevant articles from journals indexed in the international database in which the risks identified in transactions with related parties were highlighted. The research results show the main risks identified were fraud risk, risk of misstatements and the company value manipulation risk. In conclusion, it can be stated that there are additional factors in the audit of related party transactions that the auditor must take into account so that there is no impact on the correctness and accuracy of the results of the final audit report.

Suggested Citation

  • Lioara-Veronica Pasc & Camelia-Daniela HaÈ›egan, 2020. "Related Parties’ Transactions: A Literature Overview on Auditor’s Risk," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(2), pages 1021-1030, December.
    • Handle: RePEc:ovi:oviste:v:xx:y:2020:i:2:p:1021-1030
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    References listed on IDEAS

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    Cited by:

    1. Lioara-Veronica PASC & Camelia-Daniela HATEGAN, 2021. "Reporting Significant Transactions with Affiliated Parties of Listed Companies on Stock Exchange," The Audit Financiar journal, Chamber of Financial Auditors of Romania, vol. 19(162), pages 359-359, May.

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    More about this item

    Keywords

    transactions; related parties; auditor; risk; transfer pricing;
    All these keywords.

    JEL classification:

    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation
    • K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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