Immersing in audit

Related party  is a party that is either: 1. A related party as defined in the applicable financial reporting framework; or 2. Where the applicable financial reporting framework establishes minimal or no related party requirements: a. A person or other entity that has control or significant influence, directly or indirectly through one or more intermediaries, over the reporting entity. b. Another entity over which the reporting entity has control or significant influence, directly or indirectly through one or more intermediaries; or c. 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 The objectives of the auditor regarding the audit of  related party  transactions are: · To recognize fraud risk factors, if any, arising from related party relationships, · To conclude whether the financial statements achieve fair presentation and are not misleading and ·

  Accounting estimate is a monetary amount for which the measurement, in accordance with the requirements of the applicable financial reporting framework, is subject to estimation uncertainty. Estimation involves judgements based on the latest available, reliable information. For example, estimates may be required of: (a) bad debts (b) inventory obsolescence. (c) the fair value of financial assets or financial liabilities (d) the useful lives of, or expected pattern of consumption of the future economic benefits embodied in, depreciable assets; and (e) warranty obligations   (f) outcome of long-term contracts (g) costs arising from litigation settlements and judgements. (h) Provision against the carrying amount of an investment where there is uncertainty regarding its recoverability. The use of reasonable estimates is an essential part of the preparation of financial statements and does not undermine their reliability. But the process of making accounting estimates