State the circumstances indicative of fraud risk conditions with regard to related parties?  (a) Low importance given by management towards related party transactions (b) Inactive participation of those charged with governance (c) Management override of controls (d) Lack of understanding of accounting standards with regard to related parties. The definition of a related party is complex and to some…

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1. INTRODUCTION Parties are considered to be related when one party can control or exercise significant influence over the operating and financial policies of the other party. Significant influence is participation in policies but not control over policies. Significant influence may be gained by share ownership or by agreement. Examples of relation parties are: (a) Parent and subsidiaries (b)…

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