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Question 1: Which of the following best describes the reason that auditors are concerned with the detection of related party transactions?
Multiple Choice
Point 1: The financial statements must often be adjusted for the effects of material related party transactions.
Point 2: Material related party transactions must be disclosed in the notes to the financial statements.
Point 3: The substance of related party transactions will differ from their form.
Point 4: In a related party transaction one party has the ability to exercise significant influence over the other party.
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