A CPA Performs Bookkeeping Services for a Client and Then

question 95

Multiple Choice

A CPA performs bookkeeping services for a client and then performs an audit of those financial statements. This is an example of a ________ threat.

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

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Definitions:

Operating Cash Flow

The revenue generated by a company through its primary business functions.

Interest Expense

This is the cost incurred by an entity for borrowed funds, which can include the cost of bonds, loans, and lines of credit.

Depreciation

The allocation of the cost of an asset over its useful life, reflecting the loss in value over time.

Net Working Capital

The measure of a business's available short-term resources versus its short-term financial commitments, indicating its near-term financial strength.