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Tip 5: Search for related party transactions

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Learn about the importance of the control point "Suspicious Keyword" and how it benefits the analysis.

How does this add value to your audit?

Suspicious Keyword flags all transactions that contain words in the Memo field that may indicate suspicious activity. These words can be customized the Engagement Settings.

To find related party transactions, configure these keywords to be of related parties. Filter for the Suspicious Keyword control point in the Filter Builder in the Data table to filter the results for just transactions/entries with related parties. You can export all related party transactions/entries from the Data table.

Use Case Example

MindBridge AI can be used to identify and inform your testing strategy around related party transaction by leveraging the Suspicious Keyword control point. Suspicious Keyword is customizable in the sense that additional words or phrases can be added for MindBridge AI to look for in the memo field of all the general ledger transactions.

Suspicious Keyword control point

In this example, two names have been added to the Suspicious Keyword control point in the Engagement Settings. One is Caputo, who is a principal in this company. The second is Waterton, which is a related company under common ownership.

suspicious keyword control point with Caputo and Waterton as keywords

Any transactions with memo fields that reference these names would be of audit interest. It could also help aggregate entries for no disclosure on the financial statements. Being able to establish this and then through the scoring process have any such transactions also drive risk score is very powerful.

Filtering the Data Table

Use the data table post analysis to filter the transactions specifically by the suspicious keyword control point and further build the query for certain keywords to specifically identify transactions for investigation. Using the filter builder, the Suspicious Keyword control point has been set as the first condition.

filter builder with control point suspicious keyword

There are 6 entries in the ledger that have triggered on one of those words or phrases that have been defined in the engagement settings (Caputo or Waterton).

mindbridge data table with filtered transactions

To look further for one of those related party items that were specified, an additional condition to the filter can be added. By searching for the keyword "Caputo", we can further identify that 4 of the transactions have trigger the Suspicious Keyword control point specific to the related party Caputo was itemized. 

mindbridge filter builder searching for keyword Caputo and identifying four transactions

By viewing the details of the transactions after application of the 2 filters — one for the control point Suspicious Keyword, the second looking specifically for entries that triggered based on the related party Caputo, there are 4 transactions to add to the audit plan as requiring further investigation as well as related party summarization.

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