You are appointed as a Secretarial Auditor for audit of Group Companies comprising of 20 plus companies. There are numerous transactions between the group companies and lot of Inter Company Transfer of funds had taken pl

Suspicion is the positive tendency to doubt the trustworthiness of appearances and therefore to believe that one has detected possibilities of something unreliable, unfavorable. The following transactions relating to company formation and management may be considered as the suspicious transactions which may or may not be with the group companies, where the detailed audit is need to be performed are: subsidiaries which have no apparent purpose; companies which continuously make substantial losses; complex group structures without cause; uneconomic group structures for tax purposes; frequent changes in shareholders and directors; unexplained transfers of significant sums through several bank accounts; use of bank accounts in several currencies without reason; purchase of companies which have no obvious commercial purpose; sales invoice totals exceeding known value of goods; makes unusually large cash payments in relation to business activities which would normally be paid by cheques, banker's drafts etc; and transferring large sums of money to or from overseas locations with instructions for payment in cash.