An Auditor Searching for Related Party Transactions Should Obtain an Understanding

Multiple Choice

An auditor searching for related party transactions should obtain an understanding of each subsidiary's relationship to the total entity because:

A) the business structure may be deliberately designed to obscure related party transactions.
B) this may reveal whether transactions would have taken place if the parties had been unrelated.
C) transactions may have been consummated on terms equivalent to arm's-length transactions.
D) this may permit the audit of intercompany account balances to be performed as of concurrent dates.