The Canadian Institute of Chartered Accountants (CICA) Has Taken a Principles-Based

question 6

Multiple Choice

The Canadian Institute of Chartered Accountants (CICA) has taken a principles-based approach to auditor independence, whereas the Federation des Experts Comptables Europeens (FEE) has taken a conceptual approach. What is the difference?

• A) The principles-based approach has been effective, but the conceptual approach has not.
• B) The principles-based approach offers more flexibility in compliance than the conceptual approach does.
• C) The principles-based approach gives specific rules and prohibitions that must be followed, but the conceptual approach asks auditors to focus on the aim of independence rather than rules.
• D) The conceptual approach is only theoretical and hasn't yet been applied, whereas the principles-based approach is currently in practice.

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Definitions:

Descending Colon

Part of the colon extending from the left colonic flexure to the sigmoid colon.

Ascending Colon

The first main part of the large intestine, which absorbs water and salts as it carries waste upward from the cecum toward the transverse colon.

Gallbladder

A tiny organ situated beneath the liver, responsible for storing and concentrating bile, which is a digestive liquid created by the liver.

Bile

Fluid secreted from the liver into the duodenum; consists of bile salts, bile pigments, bicarbonate ions, cholesterol, fats, fat-soluble hormones, and lecithin.