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    Purpose and effect of benefiting related parties

    Posted By : abhishek mishra / Published on : 25-Mar-2023 04:50 AM / View : 330 / Comment : 1

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    Hello All,

    Is it the responsibility of the audit committee to ensure that transactions with unrelated parties do not have the purpose and effect of benefiting related parties”
    Read more on : parties related benefiting effect purpose

    • Yes, it is the responsibility of the audit committee to ensure that transactions with unrelated parties do not have the purpose and effect of benefiting related parties. The audit committee is responsible for overseeing the financial reporting process of the company, including ensuring compliance with accounting standards, internal control systems, and legal and regulatory requirements.

      One of the key roles of the audit committee is to review and oversee related party transactions. Related party transactions are those transactions that take place between a company and its related parties, which may include directors, key managerial personnel, their relatives, and companies controlled by them. Such transactions may pose a risk of conflict of interest, and it is the responsibility of the audit committee to ensure that these transactions are conducted at arm's length and in compliance with the relevant laws and regulations.

      The audit committee should review and approve related party transactions and ensure that they are properly disclosed in the financial statements. The committee should also ensure that the transactions are conducted on fair and reasonable terms, and that they do not result in any undue benefit to related parties.

      In addition, the audit committee should ensure that there are adequate internal control systems and processes in place to identify, monitor and report related party transactions. The committee should also ensure that management has implemented appropriate policies and procedures to manage related party transactions, and that they are regularly reviewed and updated as necessary.

      Overall, it is the responsibility of the audit committee to ensure that the company's financial reporting process is transparent, reliable, and compliant with the applicable laws and regulations, and that related party transactions are conducted in an ethical and proper manner.

      13-04-2023 / 11:56:02 AM
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