The Potential Conflict of Interest When a Single Accounting Firm

question 89

Multiple Choice

The potential conflict of interest when a single accounting firm provides both auditing and consulting services is that the firm can

• A) charge higher fees to its audit clients and lower fees for its consulting services so it can expand its consulting business.
• B) charge higher fees to its consulting clients and lower fees for its audit services so it can expand its auditing business.
• C) provide unjustifiably favorable audit reviews for firms that are large clients for its consulting services.
• D) pressure its clients into paying high fees for both auditing and consulting services.

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Definitions:

Music

Music is an art form and cultural activity involving the creation of sounds and rhythms in various styles and formats, used for entertainment, expression, and ceremonial purposes.

Novelty

The quality of being new, unique, or interesting.

Purchase Behavior

The decision-making process and actions of consumers regarding the buying of products or services.

Latin America

A region that includes countries in the Americas where Romance languages are spoken, primarily Spanish and Portuguese.