What Happens If an Independence Threat Appears to Be Insurmountable

question 133

Multiple Choice

What happens if an independence threat appears to be insurmountable?

• A)An audit firm should decline the offer to be the auditor of a prospective client or resign from the audit of an existing client.
• B)The audit firm should contact the State Board of Accountancy so they can make a press release to discourage other accountants from taking the engagement.
• C)The audit firm should make certain that safeguards are put in place to limit or remove those threats.
• D)The audit firm should take the engagement and continue to make certain that safeguards are put in place to limit or remove those threats.

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Definitions:

Interest Rate

The percentage of a loan amount charged by lenders to borrowers for the use of money, expressed as an annual percentage rate.

Net Capital Outflow

The difference between the domestic purchases of foreign assets and the foreign purchases of domestic assets, representing a nation's external investment in a given period.

Trade Quota

A government-imposed limit on the quantity or value of goods that can be imported or exported during a specified period.

Market For Foreign Exchange

The marketplace where currencies are traded internationally, determining the exchange rates between different currencies.