Which of the following events most likely would indicate the existence of related parties?

Question

Quizplus · Accepted Answer

Choice "D" is correct. Transactions based on terms that are significantly different from those that would be expected in an arm's length transaction, such as selling real estate at a price significantly different from appraised value, may be indicative of related party involvement. Choice "A" is incorrect. Executives are considered to be related parties regardless of whether or not stock options at favorable prices are granted. Choice "B" is incorrect. High turnover of management and/or board members may be caused by any number of circumstances, but is unlikely to be related to the existence of related parties. Choice "C" is incorrect. Failure to correct internal control weaknesses on a timely basis is a management decision that is unlikely to be related to the existence of related parties.

Which of the Following Events Most Likely Would Indicate the Existence