[The following paragraph was effective for audits of fiscal years beginning before December 15, 2014. See PCAOB Release No. 2014-002 for audits of fiscal years beginning on or after December 15, 2014, or return to the current version.]

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In understanding the business rationale for the transactions, the auditor should consider:

• Whether the form of such transactions is overly complex (for example, involves multiple entities within a consolidated group or unrelated third parties).
• Whether management has discussed the nature of and accounting for such transactions with the audit committee or board of directors.
• Whether management is placing more emphasis on the need for a particular accounting treatment than on the underlying economics of the transaction.
• Whether transactions that involve unconsolidated related parties, including special purpose entities, have been properly reviewed and approved by the audit committee or board of directors.
• Whether the transactions involve previously unidentified related parties ^{fn 25} or parties that do not have the substance or the financial strength to support the transaction without assistance from the entity under audit.