Joseph Smith,a Forensic Accountant,is Considering Whether to Accept an Engagement

question 46

Multiple Choice

Joseph Smith,a forensic accountant,is considering whether to accept an engagement or not.From the preliminary information of the case,he is not able to identify a specific conflict of interest.However,he realizes that there is a chance that the engagement might create the perception of a conflict of interest in the professional community.Joseph should

• A) accept the engagement as there is not real conflict of interest.
• B) not accept the engagement because law does not allow acceptance of such engagements.
• C) accept the engagement because perception of conflict is not likely to affect him.
• D) not accept the engagement as perception of a conflict could erode his credibility.

---

Definitions:

Available Inventory

The quantity of goods or materials that a company has in stock and is ready for sale or distribution at any given time.

Standard Deviation

A measure of the dispersion or variation in a set of values, indicating how much the values deviate from the mean on average.

Perfectly Positively Correlated

A statistical term describing two variables that move in the same direction with a correlation coefficient of +1, indicating a perfect positive linear relationship.

Cycle Inventory

Inventory that a company holds to meet its normal sales operations, varying over the course of an operating cycle or period.