Which of the Following Is True If an Auditor Performs

question 80

Multiple Choice

Which of the following is true if an auditor performs nonaudit services for a government entity?

• A) The scope of the audit must be reduced so that the auditor does not audit the area for which the nonaudit work was performed.
• B) The auditor is prohibited from providing nonaudit work in areas directly related to the production of accounting information.
• C) The senior members of the government entity must document their review of the nonaudit service and indicate why it is appropriate for the auditors to perform this service.
• D) The scope of the audit cannot be reduced because the nonaudit work was performed by the public accounting firm.

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Definitions:

Social Exchange Theory

A sociological and psychological theory that suggests human relationships are formed by the use of a subjective cost-benefit analysis and the comparison of alternatives.

Prospective Partners

Individuals considered or evaluated for potential romantic or business partnerships.

Relationship

A connection, association, or involvement between two or more parties, either individuals or entities.

Deal

An agreement entered into by two or more parties for the purpose of achieving a certain objective, often used in contexts of business or trade.