In related-party transactions, fraud occurs when:
a. the transactions are not properly disclosed.
b. assets are transferred between related parties at fair value.
c. arrangements are made between two parties that create a conflict of interest in a business setting.
d. the arrangement creates operating revenues.
a
FEEDBACK: a. Correct. Related-party transactions must be disclosed.
b. Incorrect. This is acceptable, as long as the related-party transaction is disclosed.
c. Incorrect. This is acceptable, as long as the related-party transaction is disclosed.
d. Incorrect.
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