In auditing related party transactions, an auditor ordinarily places primary emphasis on:
A)the probability that related party transactions will recur.
B)confirming the existence of the related parties.
C)verifying the valuation of the related party transactions.
D)the adequacy of the disclosure of the related party transactions.

Question

Quizplus · Accepted Answer

The adequacy of the disclosure of the related party transactions is the primary emphasis in auditing related party transactions. This is because related party transactions are often subject to potential conflict of interest or manipulation, and adequate disclosure ensures transparency and accountability. While the probability of recurrence, existence of related parties, and valuation of transactions may also be important, they are secondary to disclosure adequacy.

In Auditing Related Party Transactions, an Auditor Ordinarily Places Primary