Which of the Following Statements Regarding Auditors Is False

question 26

Multiple Choice

Which of the following statements regarding auditors is false?

• A) Most auditors have a longstanding relationship with their audit clients; this extended relationship and the auditors' desire to keep the lucrative auditing fees makes auditors less willing to challenge management.
• B) Most accounting firms have developed large and extremely profitable consulting divisions. Obviously, if an audit team refuses to accommodate a request by a client's management, that client will be less likely to choose the accounting firm's consulting division for its next consulting contract.
• C) Auditing firms are supposed to ensure that a company's financial statements accurately reflect the financial state of the firm.
• D) In the post Sarbanes-Oxley world, accounting firms are no longer allowed to offer both audit and non-audit services to the same firm.

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Definitions:

Perceived Problem

An issue that is recognized or identified based on subjective understanding or interpretation.

Government Compliance

Adherence to laws, regulations, guidelines, and specifications relevant to business operations or activities.

Direct Approach

A communication strategy where the main idea or message is presented at the beginning, followed by supporting details.

Key Findings

Key findings refer to the most important results or conclusions derived from research or analysis.