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    Admin posted in the group CA Final Audit Discussion Group

    1 year, 6 months ago

    M/s Ram Raj & Associates have been appointed as statutory auditors of
    Venus Ltd. for the FY 2019-20. During the year, the company has
    entered into some related party transactions. CA Ram, the engagement
    partner has taken a management representation letter regarding the
    proper accounting, presentation and disclosure of such related party
    transactions. Is there any further responsibility of CA Ram with respect
    to the other procedures to be performed for related party transactions?

    (a) No, there is no further responsibility of CA Ram as the best audit
    evidence for the related party transaction is the management
    representation letter.
    (b) No, there is no further responsibility of CA Ram as the audit firm
    is responsible for verifying the balances and disclosure of related
    party transactions. The identification of related party
    transactions is the responsibility of the management of Venus
    Ltd.
    (c) Yes, the audit firm has the responsibility to perform the audit
    procedures to identify, assess and respond to the risk of material
    misstatement arising from the entity’s failure to appropriately account for related party relationships, transactions and
    balances.
    (d) Yes, the auditor has the responsibility to detect fraud and error
    with respect to the related party transactions