For the purposes of this Auditing Standard, the following terms have the meanings attributed below:
Arm’s length transaction means a transaction conducted on such terms and conditions as between a willing buyer and a willing seller who are unrelated and are acting independently of each other and pursuing their own best interests.
Related party means a party that is either: (Ref: Para. A4‑A7)
- A related party as defined in the applicable financial reporting framework*; or
- Where the applicable financial reporting framework establishes minimal or no related party requirements:
- A person or other entity that has control or significant influence, directly or indirectly through one or more intermediaries, over the reporting entity;
- Another entity over which the reporting entity has control or significant influence, directly or indirectly through one or more intermediaries; or
- Another entity that is under common control with the reporting entity through having:
- Common controlling ownership;
- Owners who are close family members; or
- Common key management.
- However, entities that are under common control by a state (that is, a national, regional or local government) are not considered related unless they engage in significant transactions or share resources to a significant extent with one another.
See, for example, section 228 of the Corporations Act 2001.