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:

Accretionary Prism

A wedge-shaped mass of sediment and rock scraped off the top of a downgoing tectonic plate and accreted onto the overriding plate at a convergent plate boundary.

Fold and Thrust Belt

A region in the earth's crust where the rocks have been deformed by horizontal compression, leading to the formation of folds and thrust faults.

Anticlines

Upwardly convex folds in rock layers, typically formed through compression within the Earth's crust.

Synclines

Downward-curving folds in sedimentary strata, opposite of anticlines, which can also be indicators of oil and gas deposits.