Companies preparing your year-end financial disclosures will want to pay closer attention this time around to related-party transactions—auditors will be on the lookout this year to make sure those parties don’t get too wild.
2015 year-end audits will be the first to fall under Auditing Standard No. 18, Related Parties, adopted by the Public Company Accounting Oversight Board last year. It requires auditors to treat any omission as a potentially serious fraud risk, which means the firms will do much deeper digging to answer any questions they have about such transactions.
