To Emphasise Auditor Independence from Management, Many Companies

question 36

Multiple Choice

To emphasise auditor independence from management, many companies:

• A) have the independent auditor report to an audit committee of outside members of the board of directors.
• B) request that a representative of the auditor be present at the annual general meeting.
• C) appoint a member of the audit firm to the company's audit committee.
• D) establish a policy of discouraging social conduct between company employees and the staff of the audit firm.

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Definitions:

Barter

Trading goods or services directly without the use of money as a medium of exchange.

Demand Deposits

Balances in bank accounts that depositors can access on demand by writing a check.

Liquid

In financial terms, describes assets that can be easily converted into cash without much loss in value.

Demand Deposits

Accounts held in banks that can be withdrawn at any time without any advance notice to the financial institution.