In Determining the Types of Activities,engagements and Interactions an Auditor

question 20

Multiple Choice

In determining the types of activities,engagements and interactions an auditor should have with a client,the CPA and the audit firm must do which of the following?

• A)only assess the relationships of clients that pay audit fees that are material to their firm.
• B)assess all of their relationships with every client to ensure that independence is intact.
• C)focus on client satisfaction above all other considerations.
• D)realize that ethics are only guidelines and a matter of personal judgment.

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Definitions:

Binomial Experiment

An experiment or trial that can be reduced to two outcomes, success or failure, and is repeated a fixed number of times.

Continuous Random Variables

Variables capable of assuming any value within a specified range, with the potential for infinite variations.

Binomial Distribution

A probability distribution that summarizes the likelihood that a variable will take one of two independent values under a given set of parameters or conditions.

Independent Trials

Independent Trials are experiments or processes in which the outcome of any given trial does not affect the outcome of any other trial.