Which statement best describes a related-party transaction?
Correct answer: A. A transaction between a company and a connected person or entity
- A. A transaction between a company and a connected person or entity
- B. A transaction between two unrelated companies at market price
- C. A sale made by a company to an ordinary retail customer
- D. A purchase completed through a licensed commercial bank
Explanation
A related-party transaction involves the company and a director, officer, major shareholder, or an entity connected with them. Such transactions require scrutiny because personal relationships may affect objective decision-making.
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About Business Ethics and Corporate Governance
Business ethics applies principles such as honesty, fairness, responsibility and transparency to decisions involving employees, customers, investors, competitors and society. Corporate governance covers the board of directors, accountability, disclosure, internal controls, stakeholder interests, agency conflicts, corporate social responsibility, codes of conduct and whistleblowing.
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