Reasons for the requirement to disclose related-party transactions include:
A) These transactions will always be eliminated in a consolidation so otherwise there would be no record of them in a set of consolidated accounts.
B) There is a history of corporate scandals involving related-party transactions in Australia, the US, the UK and Canada.
C) There is a risk that the auditor may be a related party and this must be disclosed.
D) There is a history of corporate scandals involving related-party transactions in Australia, the US, the UK and Canada and a risk that the auditor may be a related party and this must be disclosed.

Question

Quizplus · Accepted Answer

The requirement to disclose related-party transactions is primarily due to a history of corporate scandals involving such transactions in countries like Australia, the US, the UK, and Canada. These scandals have highlighted the potential for abuse and the need for transparency in financial reporting to protect stakeholders' interests.

Reasons for the Requirement to Disclose Related-Party Transactions Include