For a Reporting Entity That Has Participated in Related-Party Transactions

question 14

Multiple Choice

For a reporting entity that has participated in related-party transactions that are material, disclosure in the financial report should include:

• A)the nature of the relationship and the terms and manner of settlement.
• B)a summary of the transactions within major classifications.
• C)a statement to the effect that a transaction was consummated on terms no less favourable than those that would have been obtained if the transaction had been with an unrelated party.
• D)a reference to deficiencies in the entity's internal control.

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Definitions:

Correlations

A measure showing the extent to which two or more variables fluctuate together.

Illusory Correlation

The mistaken perception of a relationship between two events or variables that are actually unrelated.

Positively Correlated

A relationship between two variables where they move in the same direction, meaning as one variable increases, so does the other, and vice versa.

Scatterplot

A type of graph in which the values of two variables are plotted along two axes, the pattern of the resulting points revealing any correlation present.