In Which of the Following Circumstances Would a CPA Who

question 29

Multiple Choice

In which of the following circumstances would a CPA who audits XZ Corporation lack independence?

• A)The CPA and XZ's president are both on the Board of Directors of COD Corporation.
• B)The CPA and XZ's president each own 25% of FOB Corporation,a closely held company.
• C)The CPA has an automobile loan from XZ,a financial institution.The loan is collateralized by the automobile.
• D)The CPA reduced XZ's usual audit fee by 40% prior to the audit because XZ's financial condition was unfavorable.

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Definitions:

Stemplots

A graphical representation of data that shows numerical frequencies using stems and leafs to display the distribution of a dataset.

Quantitative Variables

These are variables that represent numerical data which can be quantified or counted, allowing for mathematical operations to be performed on them.

Stemplots

A graphical method of displaying quantitative data, typically used to show the distribution of smaller datasets.

Histograms

Histograms are graphical representations of the distribution of numerical data, where the data is divided into bins or intervals, and the frequency of data points in each bin is depicted by the height of the bar.