An Auditor's Independence Is Considered Impaired If the Auditor Has

question 101

Multiple Choice

An auditor's independence is considered impaired if the auditor has

• A) an immaterial, indirect financial interest in a client.
• B) an outstanding $8,000 balance on a credit card issued by a client.
• C) an automobile loan from a client bank, collateralized by the automobile.
• D) a joint, closely held business investment with the client that is material to the auditor's net worth.

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Definitions:

Trust

The firm belief in the reliability, truth, ability, or strength of someone or something, often seen as foundational to relationships and societal interactions.

Horney

Karen Horney, a psychoanalyst who contributed significantly to the theory of neuroses and proposed theories on neurotic needs and personality development.

Dreams

are sequences of thoughts, images, and sensations occurring in a person's mind during sleep, reflecting subconscious desires or fears.

Horney

Karen Horney, a psychoanalyst known for her theory on neurotic needs and her critique of Freud's emphasis on the Oedipus complex.