To Help Ensure Adherence to the Principles of Independence, Integrity

question 9

Multiple Choice

To help ensure adherence to the principles of independence, integrity, objectivity, confidentiality and professional behaviour, an audit firm requires written representations from professional personnel. Ordinarily, these would be required:

• A) only on commencement of employment.
• B) each year for all professional staff.
• C) each time a new client is obtained.
• D) only once the staff member has qualified as a member of CPA Australia, the IPA or the ICAA.

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Definitions:

Liabilities

Liabilities are financial obligations or debts that an entity owes to external parties, expected to be settled over time through the transfer of economic benefits.

Owner's Equity

The residual interest in the assets of a business after all liabilities are subtracted, representing ownership's claim on assets.

Expenses

Expenses are the outflows or the utilization of assets or incurring of liabilities during a period in the course of generating revenue.

Cash

A liquid asset representing currency or its equivalents that can be used immediately in transactions without any conversion or delay.