Family ownership is common among regional trading and manufacturing companies. Related-party balances are not a problem by themselves; incomplete identification of them is.
We typically ask for a list of shareholders, directors, and entities under common control, then match that list to loan accounts, management fees, rent, and inventory transfers. Names that appear only in bank narratives often surface here.
Pricing of transactions with affiliates should be documented even when amounts are small. A short board minute noting the rationale for a below-market lease is often enough for disclosure context.
For groups that consolidate under Japanese GAAP or IFRS for SMEs equivalents used in practice, intra-group eliminations must agree to the related-party note. Mismatches between the consolidation worksheet and the note are a frequent clearance item.
Start the schedule mid-year. Waiting until the audit week almost always creates last-minute confirmations with relatives who are slow to reply.