Which of the Following Statements Is Correct Regarding Auditor Independence

question 23

Multiple Choice

Which of the following statements is correct regarding auditor independence as stated by the AICPA in Rule 101?

• A)A covered member's immediate family can have a direct financial interest in a client.
• B)A covered member can have a joint investment with a client.
• C)A covered member involved in the audit of a bank can have an auto loan at the bank.
• D)A covered member can have a direct financial interest in a client as long as it is not material and is disclosed properly.

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Definitions:

Standard Costs

The predetermined expenses for the production of a product or operation of a service, used as a baseline to measure performance.

Direct Labor Wage Variance

The difference between the expected cost of direct labor for production and the actual cost incurred.

Direct Labor Efficiency Variance

The difference between the actual hours worked and the standard hours expected, multiplied by the standard labor rate.