A CPA, While Performing an Audit, Strives to Achieve Independence

question 68

Multiple Choice

A CPA, while performing an audit, strives to achieve independence in appearance in order to

• A) Reduce risk and liability.
• B) Comply with the generally accepted standards of fieldwork.
• C) Become independent in fact.
• D) Maintain public confidence in the profession.

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Definitions:

EAFE Index

An index that measures the stock market performance of developed markets outside of the United States and Canada.

Non-U.S. Stocks

Shares of companies based outside of the United States, often used to diversify investment portfolios.

CAPM

The Capital Asset Pricing Model, a theory that describes the relationship between risk and expected return for assets, particularly stocks.

Exchange-Rate Risk

The potential for investors to experience losses due to changes in the exchange rate between two currencies in their foreign investment transactions.