Which of the Following Is Not a Safeguard That Is

question 66

Multiple Choice

Which of the following is not a safeguard that is ordinarily considered in evaluating threats to auditor independence?

• A)Safeguards created by the Audit Committee Reference Group.
• B)Safeguards created by the profession,legislation,or regulation.
• C)Safeguards implemented by the attest client.
• D)Safeguards implemented by the CPA firm.

---

Definitions:

Neglected-firm Effect

A theory suggesting that lesser-known, smaller companies can provide higher returns than their larger counterparts due to lack of analyst coverage.

Excess Returns

Returns on an investment that exceed a benchmark or average return, indicating higher-than-expected performance.

Abnormal Returns

Returns on a security or portfolio that exceed what is predicted by market models, such as the CAPM, indicating outperformance.

Hyman Minsky

An American economist known for his theories on financial instability and the inherent tendency of financial markets to move towards crisis.