Auditors are under new orders starting next year to take a closer look at some of the riskiest transactions involving “related parties,” or any business entity or individual who is close to senior executives or the board of directors.
The PCAOB adopted Auditing Standard No. 18, Related Parties, along with some related amendments to other auditing standards to focus auditors’ attention on related party transactions, significant unusual transactions, and the company’s financial relationships and transactions with senior executives. The board first introduced the standard in early 2012 and revised it following feedback in 2013 before adopting the final rules.
