The Ethical Rules State That Independence of the External Audit

question 22

Multiple Choice

The ethical rules state that independence of the external audit firm is considered to be impaired if:

• A)the audit firm provides management advisory services to the client.
• B)the audit partner purchases the client's product at normal retail prices.
• C)the audit firm has served as the external auditor for many years.
• D)an immediate relative of one of the partners is the beneficial owner of shares forming a material part of the share capital of the client.

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Definitions:

Wrongful Death

A legal term referring to a death caused by the negligence or misconduct of another person or entity.

Creditor

An individual, institution, or organization to whom money is owed by a debtor.

Statutes

Laws established by a legislative body in government that dictate how certain matters should be handled legally.

Defamation

A false statement presented as fact that causes injury or damage to the character or reputation of the person about whom it is made.