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:

Fringe Benefits

Fringe Benefits are additional benefits supplementing an employee's salary, such as health insurance, paid vacations, and retirement plans.

Winner-Take-All Markets

Markets in which the top performers or companies receive a disproportionately large share of the rewards, and the remaining competitors are left with very little.

Hourly Wage

The amount of money paid for each hour of work.

Dual Labor Market Theory

A theory suggesting the labor market is divided into two segments—the primary (high wage, good jobs) and the secondary (low wage, poor quality jobs) sectors.