Detection of related party transactions


Which of the following best describes the reason that auditors are concerned with the detection of related party transactions?

A. The financial statements must often be adjusted for the effects of material related party transactions.

B. Material related party transactions must be disclosed in the notes to the financial statements.

C. The substance of related party transactions will differ from their form.

D. In a related party transaction one party has the ability to exercise significant influence over the other part

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Accounting Basics: Detection of related party transactions
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