The Failure of Many Auditing Firms to Raise Red Flags

question 78

Multiple Choice

The failure of many auditing firms to raise red flags about accounting irregularities in companies such as Enron and WorldCom is generally attributed to all of the following factors except the

• A)desire to get future auditing contracts from the company.
• B)desire to get consulting work from the company because most audit firms also do consulting work.
• C)fact that auditors are appointed by the firm.
• D)failure of U.S. audit firms to hire technically qualified professionals.

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Definitions:

Major Effects

Significant impacts or outcomes resulting from a particular cause or intervention, often used in the context of scientific studies or environmental changes.

Nonrenewable Resource

Resources that cannot be replenished naturally within a human lifespan, such as fossil fuels and minerals.

Electronic Devices

Equipment that uses electrical power to achieve a particular function, including devices like smartphones and laptops.

Sustainability

The ability to maintain or improve environmental, social, and economic conditions for future generations through responsible and careful use of resources.