Disclosure of Related Parties Is Essential in Financial Reporting Because

question 17

Multiple Choice

Disclosure of related parties is essential in financial reporting because:

• A) related parties cannot be trusted;
• B) there are certain limits imposed on entities in regards to how many related party transactions they could have;
• C)related parties have the potential to affect an entity's profit or loss and financial position that might not otherwise occur;
• D) a high number of corporate collapses are caused by related party transactions.

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Definitions:

Psychology

Research focused on understanding the human brain and its activities, mainly as they impact behavior in certain situations.

Unconscious Mind

That part of the mind which is inaccessible to the conscious mind but that affects behaviors and emotions.

B.F. Skinner

Regarded as one of the most influential psychologists, Skinner is known for his work in behaviorism and the development of the operant conditioning theory.

Psychology

The systematic investigation of mental activities and behaviors.