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:

Selling Stock

The act of disposing of shares in a company, either privately or publicly, typically to raise capital or realize gains from investment appreciation.

Abnormal Returns

Returns on a security or portfolio that exceed the expected rate of return, not predicted by market models or theories.

Direct Expenses

Costs directly attributable to the production of a specific product or service, such as materials and labor.

Rights Offering

A rights offering is a method by which a company raises capital by offering existing shareholders the right to buy additional shares directly, usually at a discount to the current market price.