Related-party transactions played a major role in accounting scandals that happened at Enron and Tyco International. These scandals led to the Sarbanes-Oxley Act of 2002 and prompted auditors to take a closer look at related-party transactions and financial relationships. Such scandals aren’t unique to large public companies that engage in complex business transactions, however. In fact, they’re even more prevalent among small private companies without auditors and financial analysts to scrutinize their financial results.
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Topics: Commercial Lenders, Related-Party Transactions, Sarbanes-Oxley, Uncategorized