RELATIONS WITH RELATED PARTIES AND ENTITY`S MANAGEMENT

Business globalization and broad access to the capital market’s products confer a significant importance to the related parties, be it persons or entities which have the capital and/or exercise direction over, or are family members or close relatives. Presenting the information regarding the relations and transactions with the related parties is the entity’s management responsability. Different studies notice that, in many cases, the management uses the decision-making powers to hide the relations with the related parties or uses the related parties to transfer upon them risks or debts. Some of the financial scandals with an international level impact brought into the spotlight fraudulent financial reportings by omitting to present or incorrectly presenting the relations and transactions with the related parties. In Romania, Companies Acts and the capital market’s legislation require the presentation of the relations and transactions with the related parties under conditions of complete information and transparency. It is noticeable that vicious organisation of the managemnt systems leads to situations which allow the intentional veiling of these relations. Thus, miscorrelation of different documents in which responsibilities and hierachical relations at a managerial level are stipulated create the possibility of sideslips from the presentation requirements .