Define the Term "Related Party" and Discuss Why an Auditor

question 161

Essay

Define the term "related party" and discuss why an auditor should identify the client's related parties early in the audit.

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Definitions:

Primacy Effect

The tendency to recall the first items in a sequence more readily than the middle items.

Overall Impression

The sum of thoughts, feelings, or attitudes someone forms about an entity (person, place, or thing) based on comprehensive or general observation.

Self-Serving Bias

The tendency to attribute one’s successes to dispositional causes and one’s failures to situational causes.

Dispositional Attribution

Attributing a behavior to some internal cause, such as a personal trait, motive, or attitude; an internal attribution.