[Muse0407]

Hi,

I read an explanation for the following question from Ninja MCQ, but I still don’t get why the answer is “C”. Can anyone please clarify it for me?

<question>

An auditor most likely would modify an unmodified opinion if the entity’s financial statements include a footnote on related party transactions:

A. disclosing loans to related parties at interest rates significantly below prevailing market rates.

B. describing an exchange of real estate for similar property in a nonmonetary related party transaction.

C. stating that a particular related party transaction occurred on terms equivalent to those that would have prevailed in an arm’s-length transaction.

D. presenting the dollar volume of related party transactions and the effects of any changes in the method of establishing terms from prior period.

Thanks!