Disclosure of Related Parties Is Essential in Financial Reporting Because

question 26

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:

Sample Size

Refers to the number of observations or elements selected from a population to conduct a study.

Population Proportion

A fraction or percentage that represents a part of the total population sharing a particular characteristic or attribute.

Sample Proportion

The fraction or percentage of the sample that represents a particular trait or characteristic.

Confidence Interval

An interval of values, obtained from the analysis of sample data, which is probable to include the value of an unspecified population parameter, within a given level of certainty.