An Audit Client Hires a Member of the Audit Engagement

question 16

Multiple Choice

An audit client hires a member of the audit engagement team to be its new controller.Sarbanes-Oxley rules require that:

• A)The new controller sever all relations with the CPA firm,including any retirement funds.
• B)The new controller not take part in any discussions regarding the retention of the audit form.
• C)The client must find a new audit firm.
• D)The client disclose the controller's relationship in the notes to the financial statements.

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Definitions:

Personal Property

Tangible or intangible items that belong to an individual or business, excluding real estate.

True Owner

The individual or entity that holds the legitimate rights to ownership or possession of property.

Finder

An individual who locates and takes possession of an item that was lost or unclaimed.

Confusion

The state of being bewildered or unclear in one's mind about something.