ASA 550 - Related Parties - April 2006
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Materiality
36 When determining materiality regarding related parties, the auditor ordinarily considers the nature and circumstances of related party transactions, as it may often be difficult to extend materiality levels used in other aspects of the audit to those involving related parties because, for example:
(a) there is no objective value or basis of measurement for some related party transactions;
(b) the requirement to measure qualitative aspects such as the extent and impact of control or significant influence, or the impact of transactions on the users of the financial report; and
(c) director related disclosures are deemed material regardless of the quantum of the amounts involved.
37 The auditor may consider it appropriate to request those charged with governance and management to estimate or place an imputed value on transactions in order to determine the impact on the financial report, for example transactions that have occurred but which have no recorded value.