When Making a Client Continuance Decision the Auditor Should View

question 26

Multiple Choice

When making a client continuance decision the auditor should view an individual client as

• A)an individual stock in an investment portfolio from a risk and return perspective.
• B)a stand alone investment with a fixed level of risk and return.
• C)since risk is unknown it is not a factor in the decision and the auditor should seek the highest fee possible.
• D)an auditor must charge a standard fee based on the size of the client to maintain independence.

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Definitions:

Market Signals

Information or indicators that suggest the future direction of market prices, helping investors and businesses make decisions.

Uncertainty

The state of having limited knowledge where it is impossible to exactly describe existing states, outcomes, or future events.

Individual Mandate

A requirement for individuals to have health insurance or pay a penalty, originally a key provision of the Affordable Care Act.

Affordable Care Act

The Affordable Care Act, also known as Obamacare, is a law enacted to increase health insurance quality and affordability, and lower the uninsured rate by expanding public and private insurance coverage.