Question

To curb potential abuse, publicly traded companies:

a. May not do business with related parties

b. May not have related parties serve on their Boards of Directors

c.May do business with related parties, as long as such relationships and transactions are clearly disclosed

b. May do business with related parties as long as such transactions occur at fair market value, as determined by the company's independent auditors

Answer 1

Potential abuse means it is likelihood that abuse will occur in front of public traded companies. To curb that potential abuse stop doing business or not rising that agenda in front of Board of directors of related parties will not help in disclosing the source of abuse. Same will be curbed only if company keep on doing business with related parties till disclosure of transactions and relationship is clear (with the passage of time all ambiguities will be cleared)

C is correct option

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