A Professional Accounting Firm Has Several Audit and Tax Clients;

question 4

Multiple Choice

A professional accounting firm has several audit and tax clients; however, a single client represents 40% of the firm's revenue.This situation could result in the following threat to professional independence:

• A)Self-review
• B)Intimidation
• C)Advocacy
• D)Familiarity
• E)Over-dependence

---

Definitions:

Risk-Loving

A personality trait or behavior of individuals who prefer or seek out risk in their investment choices, with the potential for high returns.

Risk-Averse

A preference for guaranteed outcomes over those with uncertainty, indicating a desire to avoid risk.

Insurance

A financial product sold by insurance companies to safeguard the purchaser against the risk of loss, damage, or liability.

Premiums

Regular payments made to an insurance company in exchange for coverage, or the additional cost paid for products or services perceived as offering greater value.