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.

---

Definitions:

Socioeconomic Status

A combined measure of an individual's or family’s economic and social position relative to others, based on income, education, and occupation.

Sigmund Freud

An Austrian neurologist known for founding psychoanalysis, a method for treating psychopathology through dialogue between a patient and a psychoanalyst.

Id

In psychoanalytic theory, the part of the personality responsible for basic drives and instincts.

Ego

In Freud’s theory, a set of reactions that try to reconcile the id’s blind pleasure strivings with the demands of reality.