Obtaining further information on significant transactions outside the entity’s normal course of business enables the auditor to evaluate whether fraud risk factors, if any, are present and, where the applicable financial reporting framework establishes …

Examples of transactions outside the entity’s normal course of business may include: Complex equity transactions, such as corporate restructurings or acquisitions. Transactions with offshore entities in jurisdictions with weak corporate laws. The leasing …

Understanding the nature of significant transactions outside the normal course of business (Ref: Para.  16(a) ) …

Enquiring into the nature of the significant transactions outside the entity’s normal course of business involves obtaining an understanding of the business rationale of the transactions, and the terms and conditions under which these have been entered …

Enquiring into whether related parties could be involved (Ref: Para.  16(b) ) …

A related party could be involved in a significant transaction outside the entity’s normal course of business not only by directly influencing the transaction through being a party to the transaction, but also by indirectly influencing it through an …

Sharing Related Party Information with the Engagement Team (Ref: Para.  17 ) …

Relevant related party information that may be shared among the engagement team members includes, for example: The identity of the entity’s related parties. The nature of the related party relationships and transactions. Significant or complex related …

Fraud Risk Factors Associated with a Related Party with Dominant Influence (Ref: Para.  19 ) …

Domination of management by a single person or small group of persons without compensating controls is a fraud risk factor. [24]   Indicators of dominant influence exerted by a related party include: The related party has vetoed significant business …