The Statement in Relation to Issues for Auditors in Relation

question 10

Multiple Choice

The statement in relation to issues for auditors in relation to agency theory that is not true is:

• A)Auditors have a bonding and monitoring role in agency theory
• B)Smaller auditing firms have more to lose by failing to report a breach in a clients accounts than larger audit firms
• C)Research in the US did not support the proposition that promoters of initial public sharer offerings using a higher quality auditors would have lower holdings of shares than promoters in companies using lower quality auditors
• D)Researchers have refined the concept of high quality auditors to include those who specialise in certain industries or contracts

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Definitions:

Subscription Revenue

Income earned by a company through the sale of subscriptions for services or products, often recognized over the subscription period.

Trade Magazine Subscription

The cost incurred by a business for subscribing to a publication that targets a specific industry or professional field.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset since it was placed in service.

Liability Accounts

Accounts on the balance sheet that represent obligations of the company, including loans, accounts payable, mortgages, and accrued expenses.