In the Investigation of a Potential New Client, Besides Inquiring

question 14

Multiple Choice

In the investigation of a potential new client, besides inquiring of the existing auditor, the prospective auditor should make inquires of other third parties. Which of the following is least likely to be included in this inquiry?

• A) legal advisers/solicitors.
• B) bankers.
• C) customers.
• D) the chamber of commerce.

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Definitions:

Producer Surplus

The discrepancy between the price at which sellers are prepared to offer a product and the actual price they end up getting.

Consumer Surplus

The difference in total payment consumers are able and willing to offer for a good or service, compared to the payment they actually provide.

Government Spending

Expenditures made by the government for its operations, investments, and social programs.

Subsidy

Financial support provided by the government to individuals, businesses, or industries, usually to encourage the production of certain goods or services.