Independence Issues That Would Preclude an Audit Firm from Proposing

question 46

Multiple Choice

Independence issues that would preclude an audit firm from proposing on a potential audit client:

• A) are only applicable on public company audit engagements.
• B) are not affected by the Sarbanes-Oxley Act.
• C) cannot be determined until the audit planning process is complete.
• D) may result from current business relationships of the audit firm's former employees.

---

Definitions:

Oxidation

Oxidation is a chemical reaction involving the loss of electrons by an atom, molecule, or ion.

Oxidation Number

A number assigned to an element in chemical combination which represents the number of electrons lost or gained by an atom of that element in the compound.

Compound

A substance made up of atoms of two or more different elements chemically bonded together.

Oxidation Number

A number that represents the total number of electrons an atom either gains or loses in order to form a chemical bond with another atom.