A Familiarity Threat at an Audit Engagement Occurs When

question 12

Multiple Choice

A familiarity threat at an audit engagement occurs when

• A)the member has a financial interest in the client.
• B)it is difficult to behave with professional skepticism.
• C)PA promotes the client's position to third parties.
• D)the member discloses financial information about the client.

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Definitions:

Recession

A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.

Marketing Department

A division within a company responsible for promoting and selling its products or services.

Lewin's Approach

A psychological methodology that suggests behavior is a dynamic balance of forces working in opposing directions.

Unfreezing

The initial stage in the change process where previous behaviors are questioned or deemed ineffective, making room for new behaviors to be adopted.