The Undue Influence Threat Is Most Likely to Be Present

question 36

Multiple Choice

The undue influence threat is most likely to be present when:

• A) A client and a CPA disagree over whether a change in accounting principle has a material effect on the client's reported results
• B) A client and a CPA disagree over whether the valuation model selected by the client for expensing compensation costs associated with employee grants of stock options adequately reflects the economic costs associated with this expense
• C) A CPA firm generates 19% of its total revenues from services provided to a corporation and its seven subsidiaries
• D) A CPA gives its client a "one-time only" 20% discount on fees so the CPA firm can acquire a new audit client

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Definitions:

Direct Authority

The explicit power granted to an individual within an organization to make decisions, give orders, and enforce obedience, often aligned with their position in the organizational hierarchy.

Workforce

The collective group of individuals who are engaged in any form of employment, whether in a company, organization, or self-employed.