Chesapeake Energy, Inc.: A Related-Party-Related Party Transaction
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While related party transactions are normal and happen in a majority of public companies, FASB requires these companies to also disclose such information. Auditors should examine and gather further evidence before moving on and signing off on the annual report. This is because the transactions of such parties who had some sort of relationship prior to the transaction can create a conflict of interest where it benefits the two parties, and not shareholders. In the case of Chesapeake Energy, there are several related party transactions that come to light within their financial statements. In 2011, Chesapeake Energy entered into a joint venture with various firms including Total E&P, USA, Inc. A large percentage of assets were transferred between