The Recommendation of Appointment and Review of the External Auditors

question 18

Multiple Choice

The recommendation of appointment and review of the external auditors by the audit committee is an example of:

• A)Safeguards reducing the risk of conflict of interest created by the profession, legislation, or regulation
• B)Safeguards reducing the risk of conflict of interest between an auditor and management
• C)Safeguards reducing the risk of conflict of interest within a professional accounting firm's own systems and procedures
• D)All of the above
• E)(a)and (c)only

---

Definitions:

GAAP

Stands for Generally Accepted Accounting Principles; these are a common set of accounting principles, standards, and procedures that companies must follow when they compile their financial statements.

Corporation

A legal entity owned by shareholders, recognized as a separate entity from its owners, with rights and liabilities distinct from those of its members.

Transferable Shares

Shares that can be transferred from one party to another, typically without restriction.

Corporation

A legal entity recognized by law as separate from its owners, capable of conducting business, entering into contracts, and owning assets, with shareholders who invest money for the potential of profitability.