The following requirements relate to Ms. Stitt’s testimony about the CanWest non-compete payments:
(a) The concept of a “related party” is defined by generally accepted accounting principles (GAAP). Provide a brief overview of the concept of “related party transactions.”

(b) Based on your understanding of the concept of “related party transactions,” why would the non-compete payments described in this case be considered a “related party transaction?”

(c) Summarize what the auditing standards say regarding auditor’s responsibilities with respect to identifying related party relationships and transactions.

(d) What financial statement disclosures are required by generally accepted accounting principles (GAAP) for related party transactions?