Which of the Following Is True in When a Conflict

question 21

Multiple Choice

Which of the following is true in when a conflict of interest exists in an engagement?

• A) A potential conflict of interest need not be disclosed if it does not affect the independence of the forensic accountant.
• B) A verbal consent is sufficient to acknowledge the potential conflict and waive any objections related thereto in the presence of a judge.
• C) An engagement in which a potential conflict has been identified can be accepted if the conflict does not impair the objectivity of the forensic accountant to a large extent.
• D) If a potential conflict of interest is identified, it must be fully disclosed to the client before the engagement is accepted.

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Definitions:

Capital Budgeting

The process by which investors and managers decide which long-term projects or investments a business should undertake, based on potential profitability.

What-If Questions

Scenario-based queries used to assess the impact of potential changes or decisions in a given situation.

Base Case NPV

The Net Present Value calculated under baseline assumptions, used as a standard to evaluate the viability of an investment.

Discounted Payback

A capital budgeting method that calculates the time required to recoup the investment in a project, by taking into account the present value of expected cash flows.