You are the audit manager on the audit of Alpha Ltd for the year ended 30 June 2018. Albert Giovanni is a junior auditor in your audit team. When Albert read the audit strategy for Alpha, he noticed a paragraph requiring the team to consider related parties when conducting the audit. Albert knows that the company must disclose related-party information to comply with accounting standard AASB124 (IAS24), but does not understand why the audit strategy has referred to related parties as a special risk area, and approaches you, as his manager, for an explanation.

Required:

Explain to Albert why it is necessary to consider related parties as part of the audit planning process.