Some Independence Rules Apply to All Assurance Engagements, While Others

question 13

Multiple Choice

Some independence rules apply to all assurance engagements, while others apply only to a listed entity. For the purposes of assessing the independence rules, a listed entity is defined as

• A) an organization with share capital exceeding $10 million that has public accountability.
• B) an entity whose debt or shares is listed on a stock exchange, with market capitalization and total assets greater than $10 million.
• C) any organization that has shares or debt listed on a stock exchange.
• D) an organization that has shares or debt listed on a stock exchange, and that has redeemed shares.

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Definitions:

Rescinded by Agreement

The mutual decision of parties involved in a contract to cancel or nullify the agreement.

Anticipatory Repudiation

An assertion or action by a party indicating that he or she will not perform an obligation that he or she is contractually obligated to perform at a future time.

Material Breach

A significant violation of a contract that substantially undermines the agreement, giving the aggrieved party the right to seek legal remedies.

Non-breaching Party

The party in a contractual agreement that has not failed to fulfill any terms of the contract, as opposed to the party that has broken the agreement.