Which One of the Following Would Represent an Ethical Dilemma

question 24

Multiple Choice

Which one of the following would represent an ethical dilemma for an auditor?

• A) Being treated with cancellation of the audit by a client for not agreeing with management's treatment of an accounting issue
• B) Being approached to tender for the audit of a newly formed company
• C) Being asked to complete the audit for a nonprofit organisation for no fee
• D) Being asked to undertake a non- assurance service for an audit client

---

Definitions:

Debt-equity Ratio

A gauge of how shareholders' equity and debt proportionately finance a company’s assets.

Taxes

Mandatory monetary payments or fees imposed by the government on people or organizations to finance public spending.

Bankruptcy Claims

Financial demands made by creditors against a debtor who has declared bankruptcy.

Debt/Equity Ratio

The financial ratio that illustrates the use of shareholders' equity versus debt in funding company assets.