Under the AICPA Independence Rules, the Auditor

question 74

Multiple Choice

Under the AICPA independence rules, the auditor

• A) is prohibited from performing a company's audit and installing and designing the client's new information system.
• B) does not need to document the understanding and willingness of the client to perform all management functions associated with the nonaudit service.
• C) is prohibited from doing any bookkeeping services for the client if performing the audit.
• D) must follow the more restrictive SEC independence rules when dealing with a public company.

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Definitions:

Abuse Potential

The likelihood or risk that a substance, often a drug, can lead to dependency or addiction in users.

Controlled Substances

Drugs or chemicals whose manufacture, possession, and use are regulated by government agencies due to their potential for abuse or addiction.

Schedule II

A classification for drugs with a high potential for abuse but that have accepted medical uses, requiring strict regulation and control.

Psychological Dependence

A form of dependence that involves emotional-motivational withdrawal symptoms upon cessation of drug use or behavior.