Transactions with related parties are important to auditors because:
A) they have high inherent risk.
B) of the financial statement disclosure requirements under Australian accounting standards.
C) there is a risk that they weren't valued at the same amount as they would have been if the transactions had been with an independent third party.
D) all of the above

Question

Quizplus · Accepted Answer

All three options listed are correct. Related party transactions have a high inherent risk due to the potential for conflicts of interest or self-dealing. Australian accounting standards require disclosure of related party transactions, which is important for auditors to assess their appropriateness and completeness. There is also a risk that related party transactions were not valued at arm's length, which could impact the accurate representation of a company's financial position and performance. Therefore, auditors must pay close attention to related party transactions during their audit.

Transactions with Related Parties Are Important to Auditors Because