6. M/s Ram Raj & Associates have been appointed as statutory auditors of Venus Ltd. for the FY 2019-20. During the year, the company has entered into some related party transactions. CA Ram, the engagement partner has taken a management representation letter regarding the proper accounting, presentation and disclosure of such related party transactions. Is there any further responsibility of CA Ram with respect to the other procedures to be performed for related party transactions?

(a) No, there is no further responsibility of CA Ram as the best audit evidence for the related party transaction is the management representation letter.

(b) No, there is no further responsibility of CA Ram as the audit firm is responsible for verifying the balances and disclosure of related transactions. The identification of related party transactions is the responsibility of the management of Venus Ltd.

(c) Yes, the audit firm has the responsibility to perform the audit procedures to identify, assess and respond to the risk of material misstatement arising from the entity's failure to appropriately account for related party relationships, transactions and balances.

(d) Yes, the auditor has the responsibility to detect fraud and error with respect to the related party transactions.





















Ans: (c) Yes, the audit firm has the responsibility to perform the audit procedures to identify, assess and respond to the risk of material misstatement arising from the entity's failure to appropriately account for related party relationships, transactions and balances.