The writing assignment
Using the Clarified Statement on Auditing Standards on the AICPA website, find AU-C 550 Related
Parties.
Answer the following questions. To the extent possible use your own words, if you use a direct quote
identify it as such.
• What is an “arms-length transaction” as defined by the standard?
• Why are “arms-length transactions considered less susceptible to causing material misstatements?
• Identify at least three examples of related party transactions.
• How should an auditor search for related party transactions.
Format
• Use APA rules as they relate to font, spacing, and layout. A cover page and abstract are not
needed for this short assignment.
• Provide a citation for the website that you visit, in APA style. If you refer to any other source(s)
cite that source(s) as well. In-text citations are not needed, however direct quotes should be
shown as such.
• A question/answer format is acceptable.
Grading
30 – Very well written (3 or fewer small errors, no large errors), well organized, easily readable, and
prepared in accordance with the assignment.
25 – Well written (6 or fewer small errors, no large errors), well organized, readable, and prepared in
accordance with the assignment.
21 – More than 6 but reasonable number of small errors and no large errors in writing, organized but may
need improvement, readable, and generally prepared in accordance with the assignment (only minor
deviations).
18 – More than 10, but a reasonable number, of small errors and/or one or two large errors in writing,
and/or not well organized, and/or difficult to read, and/or not fully in accordance with the topic(s)
assigned.
Less than 18 – Large errors and/or numerous small errors in writing, and/or not organized, and/or not
readable, and/or not prepared in accordance with the assignment.
NOTE: Incorrectly formatted citations on the References page will reduce the grade by four points. Do
not assume you know the APA citation style, check the rules. Do not assume that a citation that you find
online (even on Stockton’s library website) is correctly formatted. It is very likely that you may need to
correct errors.
