Which of the Following Is True of a Conceptual Approach

question 48

Multiple Choice

Which of the following is true of a conceptual approach to auditor independence?

• A) Its applicability goes beyond any specific situation and mandates a proactive approach based on clearly articulated principles.
• B) It prohibits certain nonaudit services such as bookkeeping, valuations, actuarial, and internal audit outsourcing.
• C) It requires audit committee prior approval for any service provided by the auditors.
• D) It prevents the use of legalistic devices to avoid compliance.

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Definitions:

Debts Barred

Relates to debts that cannot be legally recovered due to the expiration of a statute of limitations.

Statutes Of Limitations

Laws that set the maximum time after an event within which legal proceedings may be initiated, thus limiting the duration a party can be sued or charged.

Inadequate Consideration

This term implies an agreement in which the value exchanged between two parties is significantly disproportionate, questioning the fairness of the deal.

Promissory Estoppel

A legal principle that prevents a promisor from denying the promise or going back on it if the promisee has reasonably relied on the promise to their detriment.