Section 324CH Lists 19 Relationships That Establish a Conflict of Interest

question 45

Multiple Choice

Section 324CH lists 19 relationships that establish a conflict of interest. Which relationship that the auditor may have with the client is NOT included?

• A) Owes an amount of more than $5000 to the audited body
• B) Has an asset that is an immaterial investment in an entity that has a controlling interest in the audited body
• C) Has an asset that is a material investment in an entity that has a controlling interest in the audited body
• D) Has an asset that is an investment in the audited body

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Definitions:

Implied Warranties

Unspoken and unwritten guarantees assumed by law that the product or service offered for sale meets certain standards of quality and reliability.

Warranties of Title

Guarantees provided by a seller to a buyer that they legally own the item being sold and have the right to sell it.

Course of Dealing

The pattern of previous conduct between parties to a contract that establishes a common basis for their understanding.

Trade Usage

Common practices or customs within a particular industry, which can sometimes be recognized as legally binding in contractual agreements.