Related parties are found the same way on most engagements: a list of names from management, a search of the ledgers for those names, and a hope that nobody was missed. The hard part of related-party work is not the arithmetic. It is identification, and identification done again in every module is identification done inconsistently.
Mapped once, applied everywhere
In Audcrix a related party is established once — its nature, its relationship to the client and the value involved — and then applied to every transaction in the population. The same party is not rediscovered separately for the disclosure, the loan test and the contract approval.
- Nature, relationship and value held per party.
- Every transaction with that party found across the whole voucher population, rather than by matching a ledger name.
- Each party disclosing on its own leg, so a related-party expense is disclosed under the expense it actually is rather than lumped into one related-party total.
The three questions the law asks
- AS 18 — the related-party disclosure.
- Section 188 of the Companies Act, 2013 — contracts and arrangements with related parties.
- Section 185 — loans, guarantees and security to directors and connected persons, evaluated together with section 2(22)(e) of the Income-tax Act, because they are two readings of the same payment.
Gated by entity type
Section 185 binds companies. A firm, an LLP or a trust is not put a question that does not apply to it, and the reason is stated on the check rather than the test simply vanishing.
Every judgement recorded
When a CA concludes that a party is or is not related, or that a transaction should be treated differently, the override is recorded with who made it, when, and the reason given. That trail is what a peer reviewer asks for, and it is what lets next year's team see why this year's answer was reached.
Why identification comes first
A tool that computes related-party totals well but identifies parties poorly will find the obvious director and miss the relative's firm that costs money. Building the identity once, and reusing it, is how the second one is found.
Questions CAs ask
How does Audcrix find related-party transactions?
Each party is mapped once with its nature, relationship and value, and every transaction with that party is then found across the whole voucher population rather than by ledger name.
Does it cover section 185 and deemed dividend together?
Yes. Section 185 of the Companies Act and section 2(22)(e) of the Income-tax Act are evaluated together, because they are two readings of the same payment.
Is there an audit trail when a CA overrides a classification?
Every override is recorded with who made it, when and the reason, so a reviewer can see how each conclusion was reached.
Further reading
Related modules
- Companies Act — Companies Act 2013 provisions gated by company type, size and listing, and tested against the books — sections 185 and 188, deposits and related-party disclosure.
- Detailed Scrutiny — Transaction-level voucher scrutiny across the whole Tally population — exception flags, period read from the narration, and prior-period items confirmed by the CA.
- Client Master — Section 44AB, 194Q, labour-law and company-law applicability decided once from the client's profile — with the reason every check that does not apply is marked N/A.