Generally speaking, the existence of related party transactions ________.
A)increases inherent risk and should be investigated further
B)decreases inherent risk and should be investigated further
C)is illegal and should be reported to the Securities and Exchange Commission
D)is not worth of further investigation

Question

Quizplus · Accepted Answer

Related party transactions have the potential to create conflicts of interest and may result in financial reporting misstatements. Therefore, their existence tends to increase inherent risk and should be investigated further.

Generally Speaking, the Existence of Related Party Transactions ________