The applicable financial reporting framework may require appropriate disclosure of related party transactions in the financial statements. Select from the option list provided the reason for the performance of each procedure below. Each choice may be used once, more than once, or not at all.

The applicable financial reporting framework may require appropriate disclosure of related party transactions in the financial statements. Select from the option list provided the reason for the performance of each procedure below. Each choice may be used once, more than once, or not at all. Procedure Reason 1. Obtain an understanding of the business purpose of the transaction. 2. Review the extent and nature of business transacted with major customers, suppliers, borrowers, and lenders. 3. Request personal financial statements from each member of the board of directors. 4. Confirm the transaction amount and terms, including guarantees and other significant data, with the other parties. 5. Discuss significant information with intermediaries, such as banks or attorneys. 6. Consider whether unrecognized transactions are occurring, such as a major shareholder absorbing entity expenses. 7. Inspect and obtain satisfaction about the transferability and value of collateral. 8. Test for reasonableness the compilation of amounts to be disclosed or considered for disclosure. 9. Review accounting records for unusual or nonrecurring transactions, especially those occurring near the end of the period. 10. Request written representations from the largest suppliers. Select an option below Not typically performed relative to related party transactions Determine existence of related parties Identify related party transactions Examine related party transactions