This article summarizes the published study “Related Party Transactions and Audit Fees: Indian Evidence” (Kushwaha, Anand, Jayadev, and Raghunandan 2024). Related party transactions (RPTs) in public companies are of concern to regulators in many countries, such as India, because RPTs can be used for wealth extraction by controlling shareholders. Many public companies in India have concentrated ownership and significant presence of RPTs. After the systemically important Satyam failure in 2009, Indian legislators enacted The Companies Act of 2013 to increase transparency for RPTs and improve corporate governance standards. Kushwaha et al. (2024) show that related party sales are associated with higher audit fees and auditor resignations after the enactment of the 2013 Act. The paper discusses implications for auditors and regulators when companies have material RPTs in non-Western markets.

JEL Classifications: G34; M41; M42.

Keywords:
audit fees, related party transactions, corporate governance, India
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2025
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