Which of the Following Is a Correct Statement Regarding the Nature

question 42

Multiple Choice

Which of the following is a correct statement regarding the nature and timing of communications between an accounting firm performing an initial audit of an issuer and the issuer's audit committee?

• A)Prior to accepting the engagement, the firm must orally affirm its independence to the audit committee with all members present.
• B)The firm must address all independence impairment issues on the date of the audit opinion.
• C)Communications related to independence may occur in any form prior to issuance of the financial statements.
• D)Prior to accepting the engagement, the firm should describe in writing all relationships that, as of the date of the communication, may reasonably be thought to bear on independence.

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Definitions:

Price Increase

A rise in the cost of goods or services, often reflecting inflation or demand changes.

Portfolio

A collection of financial investments like stocks, bonds, commodities, cash, and cash equivalents, including closed funds and exchange traded funds.

Securities

Financial instruments that represent an ownership position, a creditor relationship, or rights to ownership, expressed in the form of stocks, bonds, or options.

Rate of Return

The percentage gain or loss on an investment over a specified period, reflecting the income and appreciation of an investment.