In Which of the Following Instances Would the Independence of the CPA

question 43

Multiple Choice

In which of the following instances would the independence of the CPA not be considered to be impaired? The CPA has been retained as the auditor of a:

• A)charitable organization in which an employee of the CPA serves as treasurer.
• B)municipality in which the CPA owns $25,000 of the $2,500,000 indebtedness of the municipality.
• C)restaurant where the CPA dines frequently.
• D)company in which the CPA's private investment club owns a one-tenth interest.

---

Definitions:

Confirmation Bias

The tendency to seek out information that conforms to one’s own definition of or solution to a problem.

Economic Person

A concept in economics and sociology that describes an individual who acts in a rational manner, making decisions based on maximizing personal financial gain.

Rational Decisions

Choices made based on logical reasoning, where alternatives are objectively evaluated based on facts and a clear understanding of goals.

Economic Gain

The benefit or profit derived from engaging in economic activities or investments.