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To Ensure That Audit Partners Do Not Become Entrenched, Sarbanes-Oxley

question 3

Multiple Choice

To ensure that audit partners do not become entrenched, Sarbanes-Oxley requires audit firms to change audit partners at least once every __________ years.

Definitions:

Working Capital

The difference between current assets and current liabilities, indicating the liquidity available to fund day-to-day operations.

Income Tax Rate

The percentage of income that is paid to the government as tax.

After-Tax Discount Rate

This is the discount rate that has been adjusted for taxes, used to evaluate the net present value of an investment after taking into account the tax implications.

Straight-Line Depreciation

A method of calculating the depreciation of an asset which assumes the asset loses an equal amount of value each year over its useful life.