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:

Strategic Management Process

A comprehensive approach to planning and guiding an organization's strategy over the long term.

Compensation

The total of all rewards provided to employees in return for their services, including salary, benefits, bonuses, and other forms of payment.

Conflicts of Interest

Situations where a person or organization could potentially benefit personally from their actions or influence, which might compete with their duties or the interests of their employer or clients.

Corporate Growth

The expansion of a company's market share, revenue, size, or production capabilities, often seen as a measure of success.