An independent auditor finds that the client purchased land owned by an officer of the company for an amount in excess of its asking price. this finding indicates the existence of related party transactions.
Any transaction, arrangement, or relationship—or series of related transactions, agreements, or relationships—in which I the Company or any of its subsidiaries is or will participate, and (ii) any Related Party has or will have a direct or indirect interest, is referred to as a "Related Party Transaction."
Related-party transactions occasionally involve agreements for the sale of products or services at lower (or more advantageous) prices than those in comparable arm's-length deals between unconnected third parties. For instance, a spinoff company may lease office space at a discount from its parent company.
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