Indicate Whether You Agree or Disagree with the Following Statements

question 15

Essay

Indicate whether you agree or disagree with the following statements and explain your reasoning.
a) To ensure that it is independent of prospective and continuing clients, an audit firm must review the threats to independence, and make certain that safeguards are put in place to limit or remove those threats.
b) The final stage in the client acceptance and continuance decision process involves assessing independence threats.
c) By signing the engagement letter, management is not necessarily considered to be responsible for the financial statements.
d) To successfully sue an auditor, a plaintiff must only prove that a duty of care was owed by the auditor.

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Definitions:

Renovation Cost

Expenses associated with upgrading or restoring the structure, functionality, or appearance of a property.

Initial Investments

Initial investments are the upfront sums spent to start a project, purchase assets, or establish a business.

Income Tax Expense

The cost incurred by a company due to the taxes on its taxable income.

After-Tax Discount Rate

The discount rate used in analyzing cash flows that accounts for taxes, representing the net cost or benefit of an investment after taxes.