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:

Eyewitness Testimonies

Statements given by individuals who have witnessed a particular event, often used as evidence in legal proceedings, though their reliability can be affected by various factors.

Ethnic Background

Refers to a person's heritage, culture, and ancestry, where individuals identify with a specific ethnic group.

Suspect

A person thought to be guilty of a crime or offense.

Recall

The ability to retrieve and reproduce from memory previously encountered material.