Related Parties and Control

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Questions and Answers

Question 1

Why is it important for auditors to be able to identify related parties in a company?

Answer 1

To identify any relationships that may transgress legislation when conducting business transactions.

Question 2

What is the solvency and liquidity test in relation to the Companies Act?

Answer 2

It refers to the ability of a company to ensure that the assets of the company fairly valued, equal or exceed the liabilities of the company, fairly valued at any reasonable point in time. Signup and view all the answers

Question 3

What is the responsibility of a company's directors in relation to the solvency and liquidity test? Signup and view all the answers

Answer 3

To ensure that the company satisfies the solvency and liquidity test when making certain decisions and/or passing resolutions. Signup and view all the answers