Question: After determining that a related-party transaction has, in fact, occurred, an auditor should a. Add a separate paragraph to the auditors standard report to explain

After determining that a related-party transaction has, in fact, occurred, an auditor should

a. Add a separate paragraph to the auditor’s standard report to explain the transaction.

b. Perform analytical procedures to verify whether similar transactions occurred, but were not recorded.

c. Obtain an understanding of the business purpose of the transaction.

d. Substantiate that the transaction was consummated on terms equivalent to an arm’s-length transaction.

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