Final answer:
True, related party transactions are not presumed to be arms-length since they involve parties with existing relationships that could affect the transaction's terms.
Step-by-step explanation:
It is true that related party transactions are not presumed to be arms-length transactions. An arms-length transaction is one in which the parties have independent interests and bargain with each other as if they were unrelated, ensuring that they act in their own self-interest. A related party transaction involves parties with existing relationships, like family members or entities under common control, which can influence the terms and outcomes of the transaction. Therefore, related party transactions require additional scrutiny to ensure fairness and proper disclosure in financial statements.