In Which of the Following Instances Would the Independence of the Auditor

question 12

Multiple Choice

In which of the following instances would the independence of the auditor most likely not be considered to be impaired?

• A)He or she has been retained as the auditor of a charitable entity in which the spouse of the auditor serves as treasurer.
• B)He or she has been retained as the auditor of a company in which the auditor's investment club owns a 10 per cent interest.
• C)He or she has been retained as the auditor of a large manufacturing company that has loaned the auditor $6 000.
• D)He or she has been retained as the auditor of a company from which the auditor purchased his or her latest motor vehicle at normal list price.

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Definitions:

Product Price

The total money demanded to buy a given product or service.

Marginal Product

The extra production achieved through the use of an additional unit of a specific input, while keeping all other inputs unchanged.

Wage Rate

The amount of money that an employee is paid per hour, week, or another unit of time for their labor.

Derived Demand

The demand for a good or service that arises from the demand for another good or service.