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 party.

Question

Quizplus · Accepted Answer

Auditors are concerned with related party transactions because they must be disclosed in the notes to the financial statements if they are material, ensuring transparency and compliance with accounting standards.

Which of the Following Best Describes the Reason That Auditors