Which of the Following Statements Is True? the CPA Firm

question 30

Multiple Choice

Which of the following statements is true? The CPA firm will lose its independence if:

• A)a staff auditor providing audit services to the client acquires stock in that client.
• B)a staff tax preparer who provides 15 hours of non-audit services to the client acquires stock in that client.
• C)an audit manager in an office different than the office providing audit services has a direct, immaterial financial interest in the audit client.
• D)a covered member has an indirect, immaterial financial interest in an audit client.

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Definitions:

Deposit

Money given in advance as security or part payment, indicating commitment to a purchase or agreement and may be refundable under specific conditions.

Specific Performance

A judicial remedy requiring a party to fulfill their obligations under a contract, typically used when monetary damages are inadequate.

Injunctions

Court orders requiring an individual or entity to do or refrain from doing specific acts.

Limitations

Restrictions or caps, often referring to the time within which legal action can be taken.