Which of the Following Best Describes Why Publicly-Traded Corporations Follow

question 21

Multiple Choice

Which of the following best describes why publicly-traded corporations follow the practice of having the external auditor appointed by the board of directors or elected by the stockholders?

• A)To promote an adversarial relationship between the auditor and the corporation's management.
• B)To enhance auditor independence from the management of the corporation.
• C)To encourage a policy of rotation of the independent auditors.
• D)To give management more leverage over the auditor's decisions.