Related P_ AA_Chapter_41

Related P_ AA_Chapter_41 - Chapter 41 Related Parties Peter...

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© Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong 1 Chapter 41 Related Parties
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© Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong 2 Agenda 1. Nature of Related Party Relationships and Transa 2. Management’s Responsibility 3. Auditor’s Responsibility 4. Risk Assessment Procedures and Related Activitie 5. Identification and Assessment of the Risks of Mate 6. Responses to the Risks of Material Misstatement 7. Evaluation of Accounting Treatment 8. Written Representations 9. Communication with Those Charged with Governa 10. Documentation
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© Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong 3 1. Nature of Related Party Relationships and Transactions Many related party transactions are in the normal course of business However, their nature may, in some circumstances, give rise to higher risks of material misstatement. For example, Related party transactions may not be conducted under normal market terms and conditions
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© Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong 4 2. Management’s Responsibility Identify and disclose related party relationships and transactions
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© Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong 5 3. Auditor’s Responsibility Perform audit procedures to identify, assess and respond to the risks of material misstatement arising from the entity’s failure to appropriately account for or disclose related party relationships, transactions or balances
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© Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong 6 4. Risk Assessment Procedures and Related Activities These aim at identifying the risks of material misstatement associated with related party relationships and transaction Understanding the Entity’s Related Party Relationships and Transactions Engagement team discussion, as required by HKSA 315 and HKSA 240 Inquire of management regarding Identity of the entity’s related parties; Nature of their relationships with the entity; and Type and purpose of the related party transactions.
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© Peter T. Y. Lau and Nelson C. Y. Lam
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This note was uploaded on 12/21/2010 for the course ACCT 410 taught by Professor Sallyli during the Fall '10 term at Hong Kong Shue Yan.

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Related P_ AA_Chapter_41 - Chapter 41 Related Parties Peter...

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