Client A has equity interests in several affiliates. In addition, Client A sits on the Board of Directors for Company B, one of the affiliates. If Client A decides to appoint his spouse as the managing director at Company B, then which of the following would be an example of a related-party transaction?
A) Sales between Client A and all of its affiliates.
B) Sales between Client A and Company B.
C) Sales from Company B to another of Client A's affiliates.
D) All of the above.

Question

Quizplus · Accepted Answer

All of the options describe transactions between parties that are related through ownership, control, or influence, making them related-party transactions. Client A's equity interests in affiliates and position on the Board of Directors of Company B, combined with the appointment of his spouse as managing director, create relationships that influence transactions among these entities.

Client a Has Equity Interests in Several Affiliates