Related-Party "Toolkit" released in time for year-end reporting.

• Author: Gibson, Kim
• Position: Accounting guidance on related-party transactions - Brief Article

Early last month the AICPA published the "Related Party Toolkit, A Guide for Auditors and Accountants." This online document, available at www.aicpa.org/news/relptyl.htm, provides auditors and accountants with guidance on the timely subject of related parties and related-party transactions.

Though it is one of the more difficult aspects of a financial statement audit, related-party transactions is one of the more important elements because: 1) GAAP requires disclosure of material related-party transactions and certain control relationships; 2) in the absence of adequate disclosure, financial statements may be distorted or misleading; and 3) the instances of fraudulent financial reporting and misappropriation of assets that have been facilitated by the use of an undisclosed related party.

"Recent business events reflect the...