Which of the Following Is NOT an Example of a Conflict

question 66

Multiple Choice

Which of the following is NOT an example of a conflict situation for CPAs in business that may lead to subordination of judgment?

• A) Making or permitting or directing another party to make, materially false and misleading entries in an entity's financial statements or records
• B) Failing to correct the entity's financial statements or records that are materially false and misleading when the CPA has the authority to record the entries
• C) Signing, or permitting or directing another to sign, a document containing materially false and misleading information.
• D) Preparing the financial statements and auditing the same work

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Definitions:

GAAP Requirements

The standards or guidelines for financial accounting and reporting that accountants are required to follow, known as Generally Accepted Accounting Principles.

Vacation Pay

Compensation paid to employees for days they are entitled to take off work but choose to work instead or as a benefit for days they are allowed not to work.

Sick Pay

Compensation provided by an employer to an employee who is absent from work due to illness.

Accrual

Accrual accounting is an accounting method where revenues and expenses are recorded when they are earned or incurred, regardless of when the cash transaction occurs.