An independent auditor finds that Baron Pty Ltd occupies office space, at no charge, in an office building owned by a shareholder of Baron Pty Ltd.This finding indicates the existence of:

Question

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The situation describes a related-party transaction where a shareholder of the company is providing office space for free. This arrangement may raise questions about the objectivity and fairness of the transaction and possible conflicts of interest. It is important for auditors to scrutinize related-party transactions to ensure that they are properly disclosed and accounted for in the financial statements.

An Independent Auditor Finds That Baron Pty Ltd Occupies Office