A related-party transaction above a materiality threshold with no approval reference recorded doesn't prove approval was skipped — the reference could simply not have been entered into the export. What it does prove is that the register, as it stands, can't demonstrate approval happened, and that's worth closing before any other testing on that transaction. Screening a transactions register for threshold-breaching rows with a blank approval column, and grouping transactions by counterparty so volume is visible, is a fast way to decide which transactions need the actual board or audit-committee minutes pulled next.
What the screen can tell you, and what it can't
A transactions export has exactly as much information as whoever built the export put into it. If the relationship field, the transaction type, and the approval reference are all populated accurately, a threshold-and-blank-reference screen is genuinely useful triage. If any of those fields are stale or inconsistently filled, the screen inherits that gap — it can only ever report what's written down, not what actually happened.
The one thing this kind of tool should never claim to do
It's tempting to extend a related-party screen into guessing which counterparties might be related based on name similarity to directors, promoters or known group entities. That's a real audit procedure — and a real audit risk, since undisclosed related parties are exactly the kind of transaction a company has an incentive not to flag — but it's also a judgement call, not a pattern match. A free tool that claims to catch undisclosed related parties from name text alone is overselling a string comparison as an audit finding.
- Blank relationship field: a data gap in the export, not evidence of an undisclosed relationship.
- Large unapproved transaction: a prompt to pull the minutes, not proof approval was missed.
- High transaction count or value for one counterparty: worth knowing, not automatically a red flag — some related parties are legitimately high-volume.
Grouping transactions by counterparty surfaces volume, but a counterparty appearing only once, for a small amount, is sometimes the one that matters most — a single large undisclosed-looking transaction can be more significant than a hundred small approved ones.
This is practical guidance written for audit teams, not an authoritative statement of any standard or statute. Standards, forms and timelines change. Check the current text issued by the ICAI and the relevant authority before relying on anything here in an audit file.
Related resources
- Related parties & disclosuresRelated-party disclosure checklist for financial statementsA related-party note that lists transactions but not relationships, or balances but not terms, is an incomplete disclosure even if every number in it is correct.
- Related parties & disclosuresRelated-party transaction testing under AS 18 / Ind AS 24Testing related-party transactions means proving the population is complete before checking what management already disclosed.
- Related parties & disclosuresUndisclosed related parties: red flags to test forThe counterparties that most need scrutiny are the ones nobody flagged as related. Here is what actually surfaces them.
Free tools, no signup
Each one reads a file entirely in your browser — or, for two of them, just answers a few questions — and nothing is ever uploaded.
- Purchase register checkDuplicate payments, round-sum amounts, weekend-dated invoices, incomplete records.
- GSTR-2B reconcilerMatches your purchase register against GSTR-2B — missing invoices either side, amount mismatches.
- Bank reconciliation checkerMatches your cash book against a bank statement — what's outstanding on each side.
- Fixed asset register checkDuplicate asset codes, missing location or useful life, negative net book value.
- Payroll red-flag scannerBank accounts shared across employees, and records missing an ID, PAN or salary.
- CARO applicability checkerAnswer a few questions about the company and see which CARO 2020 clauses likely apply.
- MSME payment delay checkerMSME-flagged invoices paid — or still unpaid — beyond the 45-day Section 22 limit.
- Depreciation useful life checkerCompares a useful life in use against the Schedule II, Part C indicative figure.
- Materiality calculatorOverall and performance materiality against PBT, revenue, assets or equity, with reasoning shown.
- Sample size calculatorStatistical sample size for a test of controls or a substantive test of detail.