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:

Full Warranty

A comprehensive guarantee that a product will perform as advertised and the seller will repair or replace defective items at no charge.

Limited Warranty

A warranty with certain conditions and limitations on the parts, time, type of defect, or other factors warrantied.

Warranty

An assurance, either express or implied, by one party that the other party can rely on its representations of fact; in sales, a binding promise regarding a product in the event that the product does not meet the manufacturer’s or seller’s promises.

Written Warranty

A documented guarantee provided by a manufacturer or seller, detailing the conditions under which a product can be returned, replaced, or repaired.