According to the Financial Reporting Council (FRC),when Is the Culture

question 141

Multiple Choice

According to the Financial Reporting Council (FRC) ,when is the culture of an audit firm likely to provide a positive contribution to audit quality?

• A)When the leadership of the audit firm ensures partners and other staff have sufficient time and resources to deal with difficult issues as they arise.
• B)When the leadership of the audit firm ensures robust systems for client acceptance and continuation based on the likelihood of increased audit fees.
• C)When the leadership of the audit firm creates an environment where achieving efficiency is valued,invested in and rewarded.
• D)When the leadership of the audit firm ensures financial considerations drive actions.

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Definitions:

Opportunity Cost

The evasion of possible gains from diverse options by firmly deciding on one.

Alternative Foregone

The next best choice available to someone who has made a decision, also known as the opportunity cost.

Opportunity Costs

The financial downside to eschewing the next top alternative in the spectrum of choices.

Marginal Costs

Marginal costs refer to the additional cost incurred from producing one more unit of a good or service.