A New Audit Client Has Been Taken on by a Professional

question 20

Multiple Choice

A new audit client has been taken on by a professional accountant's firm. The fee for this client's audit engagement is significantly lower than that charged by the previous accountants. This situation could result in the following threat to professional independence.

• A)Self-review
• B)Intimidation
• C)Advocacy
• D)Familiarity
• E)None of the above

---

Definitions:

Simple Random Variable

A variable that assigns a numerical value to each possible outcome of a random phenomenon in a simple and straightforward manner.

S Chart

A type of control chart used for monitoring the variability of process data over time, specifically focusing on the standard deviation of the sampled data.

Lower Control Limit

The lowest value within a control chart that serves as a threshold to signal when a process is out of control or requires adjustment.

Forging Process

A manufacturing technique involving the shaping of metal using localized compressive forces, often hammering or pressing.