The PCAOB recently issued Auditing Standard (AS) No. 18, Related Parties to strengthen auditor performance in the high-risk areas of significant unusual transactions and financial relationships, and transactions with executive officers. The change comes as the result of an internal review where the PCAOB felt the existing protocol did not contain sufficient procedures and was not properly risk-based. Auditors are now required to perform specific procedures to determine the nature of a company’s relationships and transactions with the related parties. How a company identifies these relationships and transactions, including authorization and approval, is now seen as a significant aspect…