Which of the Following Statements Is FALSE When a Public

question 1

Multiple Choice

Which of the following statements is FALSE when a public accountant (PA) has an investment in a non-client investor?

• A) This investment may be a direct or material indirect financial interest that will diminish independence with respect to a client investee.
• B) Independence is not impaired, as long as the PA does not have significant influence over the actions or financial statements of the non-client investor.
• C) Independence is impaired when the PA's investment gives him or her significant influence over the actions of the non-client investor, which might in turn influence the client investee.
• D) The independence of the PA is always impaired when a PA has an investment in a non-client investor because it puts him or her in a position similar to that of a member of management of the client investee.

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Definitions:

Creative Decision Making

An approach to decision-making that involves thinking in novel ways, incorporating unique solutions and innovation.

Broad Categories

Broad categories refer to general or wide-ranging groups or classifications used to organize concepts, objects, or phenomena, usually for the purpose of simplification or analysis.

Creative Decision Making

The process of generating and selecting innovative solutions to problems or opportunities, often through brainstorming and out-of-the-box thinking.

Political Decision-Making Processes

Procedures involved in making decisions within the context of a political system or organization.