If a Nonpublic Company Asks an Accountant to Perform a Review

question 90

Multiple Choice

If a nonpublic company asks an accountant to perform a review engagement, and the accountant has an immaterial direct financial interest in the company, the accountant is:

• A) independent because the financial interest is immaterial and, therefore, may issue a review report.
• B) not independent and, therefore, may not issue a review report.
• C) not independent and, therefore, may not be associated with the financial statements.
• D) not independent and, therefore, may issue a review report, but may not issue an auditor's opinion.

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Definitions:

Collectivism

A cultural value that emphasizes the importance of groups and the collective over the individual, promoting interdependence and cooperation.

Reciprocal Determinism

A psychological principle indicating that an individual's actions are simultaneously shaped by and shape their own characteristics and the surrounding milieu.

Self-serving Bias

The common tendency to attribute positive events to one's own character but attribute negative events to external factors.

Self-esteem

An individual's subjective evaluation of their own worth, encompassing beliefs about oneself as well as emotional states.