Most Audit Partners at CPA Firms Are Compensated Based on the Gross

question 42

Multiple Choice

Most audit partners at CPA firms are compensated based on the gross billings or net CPA firm profits generated by the audit clients that they serve.As a result,when an audit partner serves a particular client for an extended period of time,which of the following threats is most likely to arise?

• A) The self-interest threat
• B) The advocacy threat
• C) The adverse interest threat
• D) The self-review threat

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Definitions:

Descriptive

Descriptive pertains to explaining or detailing the characteristics, features or aspects of something without expressing any judgment or opinion.

Prescriptive

Offering or providing recommendations or guidelines on how something should be done.

Specialized Role

A position that requires specific skills and knowledge, tailor-made to perform particular tasks within an organization.

Social Process

An ongoing sequence of interactions and adjustments between individuals or groups in a society, shaping cultural and social development.