Which of the Following Situations Would Be an Example of a Self-Interest

question 79

Multiple Choice

Which of the following situations would be an example of a self-interest threat that would prevent a PA from auditing the client?

• A)The PA's uncle owns the business that the PA is auditing.
• B)For the last two years,the client could not pay their fees,so the PA created a loan agreement covering the fees,with the client paying 10% interest on the fees.
• C)The PA has a small bank loan at normal business interest rates with the bank that his firm is auditing.
• D)The PA has purchased a used car from one of the employees of the client.

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Definitions:

Cognitive Changes

Alterations in mental processes or structures, including perception, memory, and reasoning, which can occur over time or due to various factors.

Attitude Changes

Adjustments or shifts in an individual's perspective or feelings towards a subject, often as a result of persuasion or new information.

Questions

Inquiries posed to gather information, clarify understandings, or probe deeper into a subject matter.

Diagnose Information

The process of analyzing information to identify problems, causes, and possible solutions.