Walter Polonia Was Explaining to His Junior Staff the Implications

question 38

Multiple Choice

Walter Polonia was explaining to his junior staff the implications of sampling risk when conducting substantive testing. He made the following two statements:
Which statements, if any, were true?

• A) (i) only
• B) (ii) only
• C) both (i) and (ii)
• D) neither (i) or (ii)

---

Definitions:

Fiduciary Duty

A legal obligation of one party to act in the best interest of another when managing the other's money or property, often found in trustee-beneficiary relationships.

Duty Of Loyalty

An agent must subordinate his personal concerns by (1) avoiding conflicts of interest with the principal and (2) not disclosing confidential information received from the principal.

Joint And Several

Legal terminology indicating that all parties involved can be collectively or individually responsible for the full amount of liability.

Issue Negotiable Instruments

The act of creating financial documents, such as checks or promissory notes, that are transferable from one party to another in exchange for value.