Which of the Following Would Most Likely Be a Violation

question 51

Multiple Choice

Which of the following would most likely be a violation of the independence requirement found in the responsibilities principle under generally accepted auditing standards?

• A)An auditor on the engagement has a distant relative who is employed by a vendor that does a significant amount of business with clients.
• B)The client's Chief Executive Officer graduated from the same university as the partner in charge of the accounting firm.
• C)An auditor on the engagement owns a financial interest in the stock of the client.
• D)The client provides financial support to a number of charitable causes that also receive support from the accounting firm.

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Definitions:

Equivalent Units

A concept in cost accounting used to allocate costs to partially completed goods, quantifying them in terms of fully completed units of output.

Weighted-Average Method

The weighted-average method is used in accounting to average cost flows for inventory valuation and cost of goods sold calculation, considering the weighted average of all units available for sale.

Process Costing System

An accounting methodology used to allocate costs to products that are similar and produced continuously.

Weighted-Average Method

An inventory costing method that averages the cost of goods available for sale, used to determine the cost of goods sold and ending inventory.