How do transactions between related parties provide opportunities for behaviour not in the best interests of the reporting entity?

1.What is a related party?  2.Why would a related-party relationship expose a reporting entity to risks, or provide opportunities that may not have existed without that relationship?

 

3. How do transactions between related parties provide opportunities for behaviour not in the best interests of the reporting entity?  4. How can related-party transactions be used for profit manipulation or profit creation?  5. Outline the alternative ways in which related-party transactions could be disclosed. What approach has been adopted in AASB 124 ‘Related Party Disclosures’? Why do you think this is the case?

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the auditor should ensure control testing is performed for periods both before and after the accounting change became effective.

A major change in the accounting system has taken place during the year. The effect on control testing is that: a. the auditor should ensure control testing is performed for….

select a sample of invoices relating to motor vehicle purchases and ensure they are correctly recorded on the non-current assets master file.

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The control that would be the most effective in assuring that the proper custody of assets in the investing cycle is maintained is?

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