Reasons for the requirement to disclose related-party transactions include:
A) The risk that the performance and position of the reporting entity will be negatively affected by the transactions.
B) Key stakeholders of the entity include related parties who should be kept informed of their transactions.
C) Related-party transactions may be used to minimise total taxation payable by a group of related entities.
D) The risk that the performance and position of the reporting entity will be negatively affected by the transactions and related-party transactions may be used to minimise total taxation payable by a group of related entities.
E) None of the given answers.

Question

Quizplus · Accepted Answer

The requirement to disclose related-party transactions is important because such transactions can negatively affect the financial position and performance of the reporting entity. Furthermore, related-party transactions may be used for tax-minimisation purposes by related entities. As a result, it is essential to disclose such transactions to ensure transparency and accountability. Option A and B are

Reasons for the Requirement to Disclose Related-Party Transactions Include