Due to a Shortage of Personnel,the Client Asks a Member

question 114

Multiple Choice

Due to a shortage of personnel,the client asks a member firm to assist with the authorization of accounting transactions.This is an example of which type of threat to compliance with the rules under the AICPA Code of Professional Conduct?

• A)management participation
• B)self-interest
• C)self-review
• D)undue influence

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Definitions:

LIFO Inventory

A method of inventory valuation where the last items added to inventory are the first ones assumed to be sold, typically used to decrease tax liabilities under inflationary conditions.

Ending Inventory

The value of goods available for sale at the end of an accounting period, calculated by adding new purchases to beginning inventory and then subtracting goods sold.

Periodic Inventory System

An inventory system in which the inventory records are updated only after a physical count has been taken at periodic intervals, usually at the end of an accounting period.

Inventory Account

An account in the ledger that tracks the cost of goods a company has in stock that are available for sale.