When Auditors Divest Themselves of Shares Owned in a Client

question 47

True/False

When auditors divest themselves of shares owned in a client company, they are eliminating
their self-review threat to independence.

---

Definitions:

Mineral Rights

Legal entitlements associated with the ownership of minerals found beneath the surface of a piece of land.

Common Value Auction

A type of auction where the item for sale has a universal value that is the same for all bidders, but the bidders may have different information about this value.

Unexploited Oilfield

An oilfield that has been discovered but not yet developed or used for extraction.

Winner's Curse

A phenomenon where the winning bidder in an auction pays more than what the item is actually worth, often due to imperfect information.