An Example of a Self-Review Threat for CPAs in Business

question 27

Multiple Choice

An example of a self-review threat for CPAs in business is:

• A) Serving as both the CFO of a company and member of its audit committee
• B) Owning stock in the company the CPA works for
• C) Internal auditor accepts work she previously performed in a different position
• D) Serving as both the CFO of a company and member of the board of directors

---

Definitions:

Inflation Expectations

Inflation Expectations are the rate at which people expect prices to rise in the future, influencing their economic decisions.

Long-Run Phillips

The concept in economics that suggests there is no long-term trade-off between inflation and unemployment, indicating that in the long run, the Phillips curve is vertical.

Adverse Supply Shock

An unexpected event that suddenly decreases the supply of a product or commodity, leading to higher prices and lower quantity in the market.

Inflation Expectations

The anticipated rate of inflation in the future, which can influence consumer and business spending and saving decisions.