Which of the Following Factors Would Most Likely Cause a CPA

question 76

Multiple Choice

Which of the following factors would most likely cause a CPA to decide not to accept a new audit engagement?

• A)Lack of understanding of the potential client's internal auditors' computer-assisted audit techniques.
• B)Management's disregard for internal control.
• C)The existence of related party transactions.
• D)Management's attempt to meet earnings per share growth rate goals.

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Definitions:

Duty to Act in Good Faith

A legal obligation requiring parties to act honestly and fairly towards each other within the bounds of a contract.

Commissions

Payments made to employees or agents based on the sales they generate or the deals they complete, often a percentage of the sale price.

Breach

The act of violating a law, duty, or agreement, which can result in legal consequences or termination of the contract.

General Rules of Contract

Fundamental principles that govern the formation, interpretation, and enforcement of contractual agreements.