In Deciding Whether a Conflict of Interest Exists,the Relevant Standard

question 10

Multiple Choice

In deciding whether a conflict of interest exists,the relevant standard to be applied is whether:

• A) The CPA subjectively believes that a conflict of interest exists
• B) A reasonable observer, with reasonable knowledge of the relevant circumstances, would conclude that a conflict of interest exists
• C) In an accountant-client conflict of interest situation, at least one of the clients believes, reasonably or unreasonably, that a conflict of interest exists
• D) In a dual-client conflict of interest situation, both of the clients themselves believe, reasonably or unreasonably, that a conflict of interest exists

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Definitions:

Unit Cost

The cost incurred to produce, store, or purchase one unit of a product or service.

Modifying Style

Refers to altering the presentation or appearance of a document or webpage through changes in formats, layouts, or designs.

Make-Or-Buy Options

Decision-making process in businesses regarding whether to produce a product or service in-house or to purchase it from an external supplier.

Excess Productive Capacity

The ability of a firm to produce more than is required at the current level of demand, often leading to underutilization of resources.