• PCAOB Auditing Standards: PCAOB Adopts New Auditing Standard for Related Party Transactions and Amendments Regarding Transactions and Relationships with Executive Officers and Significant Unusual Transactions
  • June 27, 2014
  • Law Firm: Sullivan Cromwell LLP - New York Office
  • The Public Company Accounting Oversight Board has adopted Auditing Standard No. 18, Related Parties, addressing audit procedures used to evaluate transactions and relationships between a company and its related parties. Under the new standard, the auditors must (i) perform specific procedures to obtain an understanding of a company’s relationships and transactions with related parties, (ii) perform more in-depth procedures in response to risks of material misstatement associated with these relationships and transactions, (iii) communicate with the audit committee or its chair to obtain information specifically regarding related party transactions during the auditor’s risk assessment, and (iv) communicate to the audit committee or its chair the auditor’s evaluation of the company’s identification of, accounting for, and disclosure of related party relationships and transactions.