If a Professional Accountant Is Auditing a Public Company and She

question 7

Multiple Choice

If a professional accountant is auditing a public company and she receives company shares as payment for her audit services, she will be violating the following fundamental principle.

• A)Integrity
• B)Objectivity
• C)Professional due care
• D)Confidentiality
• E)All of the above

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Definitions:

Worthless Securities

Financial instruments that have lost all monetary value, often resulting in a total loss for the holder.

Holder in Due Course

A legal term for a person who has acquired a negotiable instrument in good faith and for value, and thus has certain rights to it free from many defenses.

Restrictive Indorsement

A signature on a negotiable instrument, such as a check, that limits how the instrument can be used.

Depositary Banks

Banks that hold securities (such as shares or bonds) in custody for other parties, facilitating securities trades and dividend payments.