Which of the Following Is True in When a Conflict

question 21

Multiple Choice

Which of the following is true in when a conflict of interest exists in an engagement?

• A) A potential conflict of interest need not be disclosed if it does not affect the independence of the forensic accountant.
• B) A verbal consent is sufficient to acknowledge the potential conflict and waive any objections related thereto in the presence of a judge.
• C) An engagement in which a potential conflict has been identified can be accepted if the conflict does not impair the objectivity of the forensic accountant to a large extent.
• D) If a potential conflict of interest is identified, it must be fully disclosed to the client before the engagement is accepted.

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Definitions:

Journalize

The act of recording business transactions in the journal of an accounting system, marking the first step in the accounting cycle.

Normal Balance

The side (debit or credit) of an account that is typically increased; varies depending on the account type.

Debit

An accounting entry that increases an asset or expense account or decreases a liability or equity account.

Credit

In finance, it refers to the borrowing capacity of an individual or company, or the entry on the right side of a financial account, indicating an increase in liability or decrease in asset.