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:

Endowed Gift

A donation made to an institution with the stipulation that the principal is kept intact and only the investment income is used.

Current Financial Resources

Assets that are expected to be used or turned into cash within one year, providing insight into a company's short-term financial health.

Expenditures

Outflows of money or other valuables, typically categorized as either capital expenditures (CapEx) or operating expenses (OpEx).

Salaries And Wages

Compensation received by employees for services performed, typically paid on an hourly or annual basis.