A Controlling Interest Exists When the Investor

question 126

Multiple Choice

A controlling interest exists when the investor:

• A)uses the equity method to account for the investment.
• B)uses the market value method of accounting for the investment.
• C)owns more than 20% of the investee's voting stock.
• D)owns more than 50% of the investee's voting stock.

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Definitions:

Auditing

The process of reviewing and assessing the financial statements of an entity to ensure accuracy and compliance with accounting standards.

International Auditing Standards

Rules and guidelines set for auditing practices internationally to ensure consistency, reliability, and accuracy of financial statements.

Big Four

Refers to the four largest international accountancy and professional services firms, which are Deloitte, PricewaterhouseCoopers (PwC), Ernst & Young (EY), and KPMG.

CICA Handbook

The Canadian Institute of Chartered Accountants Handbook, which provides certified accounting standards and guidelines in Canada.