Characteristics of the Capital Acquisition and Repayment Cycle Few transactions affect the account balances but each transaction is often highly material in amount 2. The exclusion of a single transaction could be material in itself. 3. There is legal relationship between the client entity and the holder of the stock, bond. or similar ownership document 4. There is a direct relationship between the interest and dividends accounts and debt and equity Arens, Loebbecke: Aua @2000 Prentice hall.IncArens, Loebbecke; Auditing, 8/E ©2000 Prentice Hall, Inc. 4 Characteristics of the Capital Acquisition and Repayment Cycle 1. Few transactions affect the account balances, but each transaction is often highly material in amount. 2. The exclusion of a single transaction could be material in itself. 3. There is legal relationship between the client entity and the holder of the stock, bond, or similar ownership document 4. There is a direct relationship between the interest and dividends accounts and debt and equity