Related Party Verification Checklist: Ind AS 24 Audit Procedures

Published: April 9, 2026 | Category: Template | Read Time: 7 minutes | Author: CORAA Team

How to Use This Checklist

Complete this checklist for every related party transaction identified. Keep organized in audit working papers by RP.

Key Points:

• Use for ALL material related parties (≥ account materiality ÷ 8)
• Complete during planning and at year-end
• Cross-reference to RP transaction testing workpaper
• NFRA will scrutinize this—be thorough

Related Party Verification Checklist Template

═══════════════════════════════════════════════════════════════
       RELATED PARTY VERIFICATION CHECKLIST (Ind AS 24)
═══════════════════════════════════════════════════════════════

CLIENT NAME:                   [Client name]
ENGAGEMENT YEAR:               [Year ended Dec 31, 202X]
RELATED PARTY NAME:            [RP name]
RP RELATIONSHIP:               [E.g., Director, Parent company]

AUDIT TEAM:
- Preparer (Senior): ___________________  Date: __________
- Reviewer (Manager): ___________________  Date: __________
- Approval (Partner): ___________________  Date: __________

═══════════════════════════════════════════════════════════════

SECTION 1: RELATED PARTY IDENTIFICATION

Objective: Identify all related parties per Ind AS 24 definition.
Include key management, family, entities with common control.

─────────────────────────────────────────────────────────────

1.1 RP CATEGORY IDENTIFICATION

Select Category:

☐ Key Management Personnel (KMP)
  - Director, CFO, Audit committee member
  - Their family members (spouse, children, dependents)

☐ Entity with Common Control
  - Parent company
  - Subsidiary
  - Associate / Joint venture
  - Other entities under common control

☐ Family Members of KMP
  - Spouse, children, dependents of directors/key personnel
  - Any entity controlled by them

Other (specify): _________________________________

─────────────────────────────────────────────────────────────

1.2 RP IDENTIFICATION PROCEDURES

Documentation Obtained:

☐ Management questionnaire completed? ☐ Yes ☐ No
  - Date received: ______________
  - Completeness checked? ☐ Yes ☐ No

☐ Board minutes reviewed (RP declarations)? ☐ Yes ☐ No
  - Period: From ________ to ________
  - RPs identified in minutes: [List]

☐ Organization structure analyzed? ☐ Yes ☐ No
  - Parent/subsidiary relationships mapped
  - Common directors identified
  - Reference: [Diagram/chart in workpapers]

☐ GL analysis for suspicious vendors/customers? ☐ Yes ☐ No
  - Top 10 customers reviewed: [List any unusual names]
  - Top 10 vendors reviewed: [List any unusual names]

☐ Bank/debt confirmations reviewed? ☐ Yes ☐ No
  - Guarantees to RPs identified: ☐ Yes ☐ No ☐ N/A
  - Contingent liabilities listed: [Amounts]

─────────────────────────────────────────────────────────────

1.3 FINAL RP STATUS CONFIRMATION

Related Party Status: ☐ CONFIRMED as RP

If Confirmed:
- Relationship clearly established? ☐ Yes ☐ No
- Control/influence evident? ☐ Yes ☐ No
- Family relationship documented? ☐ Yes ☐ No
- Supporting evidence filed? ☐ Yes ☐ No

─────────────────────────────────────────────────────────────

1.4 IF FAMILY MEMBER: RELATIONSHIP MAPPING

Family Member Name: _________________________________

Related to (KMP): _________________________________
Relationship: ☐ Spouse  ☐ Child  ☐ Dependent  ☐ Other
Evidence of control (if entity): [Describe]

═══════════════════════════════════════════════════════════════

SECTION 2: RP TRANSACTION IDENTIFICATION

Objective: Identify all transactions between company and this
related party during the year.

─────────────────────────────────────────────────────────────

2.1 TRANSACTION SEARCH

Search Procedures:

☐ GL scan for RP vendor/customer name? ☐ Yes ☐ No
  - Transactions found: [Number]
  - Total amount: ₹ __________

☐ Manual entry review for unusual entries? ☐ Yes ☐ No
  - Manual entries involving RP: [Number]
  - Total amount: ₹ __________

☐ Subsidiary/parent ledger reviewed (if group)? ☐ Yes ☐ No
  - Intercompany transactions: [Number]
  - Total amount: ₹ __________

☐ Guarantees/commitments on behalf of RP? ☐ Yes ☐ No
  - Guarantees provided: ₹ __________
  - Purpose: [Describe]

─────────────────────────────────────────────────────────────

2.2 RP TRANSACTION SCHEDULE

Prepare Schedule of All Transactions:

Transaction 1:
- Type: [Sale, Purchase, Rent, Loan, etc.]
- Date: ______________
- Amount: ₹ __________
- Terms: [Describe]
- GL Account: [Debit account]

Transaction 2:
- Type: [Description]
- Date: ______________
- Amount: ₹ __________
- Terms: [Describe]
- GL Account: [Debit account]

[Continue for all material transactions]

Total RP Transactions (Year): ₹ __________

═══════════════════════════════════════════════════════════════

SECTION 3: ARM'S LENGTH TESTING

Objective: Verify RP transactions are at arm's length (no
favoring of RP at company's expense).

─────────────────────────────────────────────────────────────

3.1 TRANSACTION 1: ARM'S LENGTH VERIFICATION

Transaction: [Description]
Amount: ₹ __________
RP: [Name]

PRICING VERIFICATION:

Price/Rate Charged: ₹ __________ per unit/year/item

Market Comparables:
- Comparable 1 (third party): ₹ __________ per unit
- Comparable 2 (third party): ₹ __________ per unit
- Comparable 3 (third party): ₹ __________ per unit
- Market range: ₹ __________ to ₹ __________

Auditor Conclusion:
☐ AT ARM'S LENGTH (within market range) ✓
☐ ABOVE ARM'S LENGTH (premium to RP) ✗ → Investigate
☐ BELOW ARM'S LENGTH (favoring RP) ✗ → Investigate

If NOT at arm's length:
- Explanation obtained: [What was stated as justification?]
- Valid reason? ☐ Yes ☐ No
  - Example: Special quality, rush delivery, volume discount
  - Verified? ☐ Yes ☐ No
- Adjustment proposed? ☐ Yes ☐ No
- Adjustment amount: ₹ __________

COMMERCIAL SUBSTANCE VERIFICATION:

☐ Transaction actually occurred (not fictitious)?
  - Evidence: [Purchase order, invoice, delivery, payment]

☐ Goods/services of acceptable quality?
  - Verified how: [Inspection, confirmation, testing]

☐ Payment terms standard for industry?
  - Payment terms: [Net 30, COD, etc.]
  - Industry standard: [Describe]
  - Comparison: ☐ Standard ☐ Unusual

Overall Conclusion:
☐ Transaction acceptable (at arm's length; commercial substance)
☐ Issues identified (see above; adjustment proposed)

─────────────────────────────────────────────────────────────

3.2 TRANSACTION 2: ARM'S LENGTH VERIFICATION

[Repeat format for each material transaction]

Transaction: [Description]
Amount: ₹ __________

Price/Rate: ₹ __________ per unit
Market Range: ₹ __________ to ₹ __________

Conclusion: ☐ At arm's length ☐ Not at arm's length

[Continue pattern for remaining transactions]

─────────────────────────────────────────────────────────────

3.3 ARM'S LENGTH SUMMARY

Total RP Transactions Tested: ₹ __________
Transactions at Arm's Length: ₹ __________
Transactions NOT at Arm's Length: ₹ __________

Issues Identified:
- Issue 1: ₹ __________ (pricing above market)
- Issue 2: ₹ __________ (below-market terms)
- Total Adjustment Proposed: ₹ __________

═══════════════════════════════════════════════════════════════

SECTION 4: BOARD APPROVAL VERIFICATION

Objective: Verify material RP transactions were approved by
board/audit committee per Companies Act.

─────────────────────────────────────────────────────────────

4.1 BOARD APPROVAL IDENTIFICATION

Material RP Transactions (>₹1 crore typically):

Transaction 1: [Description]
- Amount: ₹ __________
- Board approval required? ☐ Yes ☐ No
- Board minutes reviewed? ☐ Yes ☐ No
- Approval documented? ☐ Yes ☐ No
- Date approved: ______________

Transaction 2: [Description]
- Amount: ₹ __________
- Board approval required? ☐ Yes ☐ No
- Board minutes reviewed? ☐ Yes ☐ No
- Approval documented? ☐ Yes ☐ No
- Date approved: ______________

[Continue for all material transactions]

─────────────────────────────────────────────────────────────

4.2 APPROVAL PROCESS VERIFICATION

For Each Material Transaction:

Approving Body:
☐ Full Board (unlisted company)
☐ Audit Committee (listed company)

Independence Verified:
- RP directors recused? ☐ Yes ☐ No
- Independent directors voted? ☐ Yes ☐ No
- Minutes show recusal? ☐ Yes ☐ No

Timing:
- Approved before transaction? ☐ Yes ☐ No
- Approved after (retroactive)? ☐ Yes ☐ No
- If retroactive, documented? ☐ Yes ☐ No

─────────────────────────────────────────────────────────────

4.3 MISSING APPROVALS

Material transactions WITHOUT board approval:

Transaction: [Description]
- Amount: ₹ __________
- Reason for non-approval: [Investigate]
- Required action: Obtain retroactive approval or adjust

Resolution:
- Retroactive approval obtained? ☐ Yes ☐ No
- Adjustment proposed? ☐ Yes ☐ No
- Disclosure added? ☐ Yes ☐ No

═══════════════════════════════════════════════════════════════

SECTION 5: CONTINGENT LIABILITIES & GUARANTEES

Objective: Identify any guarantees, commitments, or contingent
liabilities on behalf of RPs.

─────────────────────────────────────────────────────────────

5.1 GUARANTEE/COMMITMENT IDENTIFICATION

Guarantees Provided (on behalf of RP):

Guarantee 1:
- RP guaranteed for: [Name of party receiving benefit]
- Bank/creditor: [Name]
- Amount: ₹ __________
- Purpose: [Loan, credit line, lease, etc.]
- Duration: From __________ to __________
- Probability of payment: ☐ Remote ☐ Possible ☐ Probable

Guarantee 2:
[Repeat format]

Total Guarantees: ₹ __________

─────────────────────────────────────────────────────────────

5.2 CONTINGENT LIABILITY ASSESSMENT

Per Ind AS 37 (Provisions):

For Each Guarantee:

Amount: ₹ __________
Probability: [Remote/Possible/Probable]

If Probable:
- Provision required? ☐ Yes ☐ No
- Provision amount: ₹ __________
- Disclosure required? ☐ Yes ☐ No

If Possible:
- Contingent liability disclosure required? ☐ Yes ☐ No
- Disclosure in notes? ☐ Yes ☐ No

─────────────────────────────────────────────────────────────

5.3 VERIFICATION

Bank confirmations received:
- Confirm mentions of guarantees? ☐ Yes ☐ No
- Amounts match audit workpaper? ☐ Yes ☐ No

Board minutes reviewed:
- Authorization of guarantees documented? ☐ Yes ☐ No
- RP recusal documented? ☐ Yes ☐ No

═══════════════════════════════════════════════════════════════

SECTION 6: DISCLOSURE VERIFICATION

Objective: Verify all RP transactions are fully disclosed per
Ind AS 24 requirements.

─────────────────────────────────────────────────────────────

6.1 DISCLOSURE REQUIREMENTS CHECKLIST

Per Ind AS 24, disclosure must include:

IDENTIFICATION OF RELATED PARTIES:
☐ KMP listed: [Directors, CFO, Audit committee members]
☐ KMP family members identified: ☐ Yes ☐ No
☐ Entities with common control listed: ☐ Yes ☐ No

RELATED PARTY TRANSACTIONS:
☐ Transaction type described (sale, rent, loan, etc.)
☐ Amount disclosed
☐ Terms described (interest rate if applicable)
☐ Outstanding balance at year-end

OUTSTANDING BALANCES:
☐ Receivables from RP disclosed: ₹ __________
☐ Payables to RP disclosed: ₹ __________
☐ Loans outstanding disclosed: ₹ __________
☐ Allowance for doubtful debts disclosed: ₹ __________

KEY MANAGEMENT COMPENSATION:
☐ Salaries & bonuses: ₹ __________
☐ Benefits: ₹ __________
☐ Post-employment: ₹ __________
☐ Other: ₹ __________

CONTINGENT LIABILITIES:
☐ Guarantees disclosed: ₹ __________

BOARD APPROVAL:
☐ RP transaction policy disclosed
☐ Material transaction approvals evidenced

─────────────────────────────────────────────────────────────

6.2 DISCLOSURE ACCURACY VERIFICATION

Compare Disclosed Amounts to GL:

Transaction 1:
- Disclosed amount: ₹ __________
- GL amount: ₹ __________
- Matches? ☐ Yes ☐ No ☐ Immaterial difference

KMP Compensation:
- Disclosed total: ₹ __________
- GL total: ₹ __________
- Reconciles? ☐ Yes ☐ No

Guarantees:
- Disclosed: ₹ __________
- Bank confirmations: ₹ __________
- Matches? ☐ Yes ☐ No

─────────────────────────────────────────────────────────────

6.3 LISTED COMPANY REQUIREMENTS

If company is listed, additional requirements apply:

☐ Form AOC-2 (RP transaction summary) prepared
☐ Form AOC-2 attached to Board Report
☐ Material RP transactions detailed in Board Report
☐ Related Party Policy disclosed
☐ Certification of arm's length pricing provided
☐ All quarterly disclosures made (if applicable)

─────────────────────────────────────────────────────────────

6.4 MISSING/INCOMPLETE DISCLOSURES

Identification of Gaps:

Missing Item: [Description]
- Should be disclosed? ☐ Yes ☐ No
- Required action: [Require client to add]
- Amendment: [Client to update notes]

═══════════════════════════════════════════════════════════════

SECTION 7: NFRA DEFENSIBILITY

Objective: Ensure RP testing is comprehensively documented for
NFRA inspection defensibility.

─────────────────────────────────────────────────────────────

7.1 DOCUMENTATION COMPLETENESS

Evidence in Audit File:

☐ RP identification summary memo
  - All identification procedures documented
  - RP list with classification (KMP, common control, etc.)
  - Supporting evidence (org chart, minutes, questionnaire)

☐ Transaction testing workpaper (per transaction)
  - Transaction description and amount
  - Pricing verification (market comparables)
  - Commercial substance evidence
  - Arm's length conclusion

☐ Board approval documentation
  - Board minutes (material transactions)
  - Approval evidence filed
  - Independence verification (RP recusal)

☐ Guarantee/contingency workpaper
  - Bank confirmations
  - GL verification
  - Disclosure assessment per Ind AS 37

☐ Disclosure review checklist
  - Disclosure completeness verified
  - Amounts reconciled to GL
  - Form AOC-2 (if listed)

─────────────────────────────────────────────────────────────

7.2 WORKPAPER QUALITY STANDARDS

Each workpaper includes:

☐ Clear objective (what is being tested?)
☐ Procedure description (how is it being tested?)
☐ Results documented (what did we find?)
☐ Auditor conclusion (what does this mean?)
☐ Significance noted (impact on audit opinion)
☐ Preparer/Reviewer/Partner signatures

Quality Check:
- All workpapers indexed? ☐ Yes ☐ No
- Cross-references clear? ☐ Yes ☐ No
- Conclusions support opinion? ☐ Yes ☐ No

─────────────────────────────────────────────────────────────

7.3 AUDIT CONCLUSION

Overall Related Party Testing:

IDENTIFICATION:
☐ Comprehensive RP identification performed
☐ All identification procedures documented
☐ No hidden RPs missed (management assertion)

TRANSACTION TESTING:
☐ All material RP transactions tested
☐ Arm's length verification completed
☐ No material non-arm's length transactions
☐ Commercial substance evident

BOARD APPROVAL:
☐ Material transactions approved by board/audit committee
☐ No missing approvals
☐ Independence procedures followed

DISCLOSURES:
☐ All required disclosures present
☐ Disclosure amounts accurate (reconciled to GL)
☐ No material disclosure deficiencies
☐ Form AOC-2 properly prepared (if listed)

OVERALL RP TESTING CONCLUSION:
☐ RP transactions tested per ISA 550
☐ Sufficient audit evidence obtained
☐ All RP transactions fairly presented
☐ Disclosures complete and accurate
☐ NFRA defensible

═══════════════════════════════════════════════════════════════

SIGN-OFF

Preparer (Senior Auditor):
Name: ____________________  Signature: ______________
Date: ____________________

Reviewer (Manager):
Name: ____________________  Signature: ______________
Date: ____________________

Partner Approval:
Name: ____________________  Signature: ______________
Date: ____________________

═══════════════════════════════════════════════════════════════

END OF RELATED PARTY VERIFICATION CHECKLIST

Key Checkpoints for RP Testing

Critical:

1. Identify ALL RPs (management questionnaire, board minutes, GL analysis)
2. Test EVERY material RP transaction for arm's length pricing
3. Verify market comparables are truly comparable (same product/service quality)
4. Confirm board approvals documented (especially for material transactions)
5. Verify disclosures reconcile to GL (common error: disclosed amounts don't match GL)

Common Errors to Catch:

• Family members not identified as RPs
• RP transactions recorded under generic vendor names (harder to spot)
• Arm's length not verified (just assumed)
• Non-arm's length transactions not adjusted
• Board approvals missing
• Disclosure amounts don't reconcile to GL

Related Resources

• Related Party Transaction FAQs: Ind AS 24 Audit Procedures
• Audit Risk Scorer: Assessment Framework
• Contract NLP: Lease Identification & Testing

About CORAA

CORAA helps Indian audit firms test related party transactions per Ind AS 24. Use this checklist for systematic RP identification, transaction testing, and disclosure completeness verification.

Learn more: Visit our website

Sources

• Ind AS 24: Related Party Disclosures
• ISA 550: Related Parties
• Companies Act, 2013: Related Party Transactions
• SEBI Listing Regulations: Related Party Transactions
• NFRA: National Financial Reporting Authority - Audit Quality Review Standards