Most Auditors Assess Inherent Risk as High for Related Parties

question 50

Multiple Choice

Most auditors assess inherent risk as high for related parties and related-party transactions because:

• A)of the unique classification of related-party transactions required on the balance sheet.
• B)of the lack of independence between the parties.
• C)of the unique classification of related-party transactions required on the income statement.
• D)it is required by generally accepted accounting principles.

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Definitions:

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