Provide a brief summary of audit procedures to mitigate the risk of unidentified or undisclosed related parties?

An entity might enter into arrangement that involve a formal or informal agreement between the entity and another party in order to establish a business relationship through vehicles or structures or conduct of certain types of transactions under specific terms and conditions. Arrangements that may indicate the existence of related party relationships or transactions that management has not identified or disclosed to auditors. SA 550 requires the auditor to obtain sufficient appropriate audit evidence about whether the related party relationships and transactions have been appropriately identified, accounted for and disclosed in the financial statements. When performing audit procedures, auditor pays particular attention to related parties that are in a position to exercise dominant influence over the entity or its management, by virtue of their ability to exert control or significant influence. During the audit, the auditor shall remain alert, when inspecting records or documents, for arrangements or other information that may indicate the existence of related party relationships or transactions that management has not previously identified or disclosed to the auditor. In particular, the auditor shall inspect the following for indications of the existence of related party relationships or transactions that management has not previously identified or disclosed to the auditor – Bank, legal and third-party confirmations obtained as part of the auditor's procedures;Minutes of meetings of shareholders and of those charged with governance; andSuch other records or documents as the auditor considers necessary in the circumstances of the entity. If the auditor identifies arrangements or information that suggests the existence of unidentified related party relationships or transactions, the auditor should determine whether the underlying circumstances confirm the existence of those relationships or transactions. If the auditor identifies related parties or significant related party transactions that management has not previously identified or disclosed to the auditor, the auditor should – Promptly communicate the relevant information to the other members of the engagement team.Request management to identify all transactions with the newly identified related parties for the auditor's further evaluation.Inquire as to why the entity's controls over related party relationships and transactions failed to enable the identification or disclosure of the related party relationships or transactions.Perform appropriate substantive audit procedures relating to such newly identified related parties or significant related party transactions.Reconsider the risk that other related parties or significant related party transactions may exist that management has not previously identified or disclosed to the auditor, and perform additional audit procedures as necessary; andIf the non-disclosure by management appears intentional (and therefore indicative of a risk of material misstatement due to fraud), evaluate the implications for the audit.