Tom,a PA,is Approached by Acme Pest Control Inc

question 23

Multiple Choice

Tom,a PA,is approached by Acme Pest Control Inc.to perform the audit of their financial statements.The founder and CEO of Acme Pest Control is Jerry,how is an old high classmate and close personal friend of Tom.Consequently,before Tom accepts to perform the audit of Acme,he will need to be especially mindful of which threat to his independence?

• A)Advocacy
• B)Familiarity
• C)Self-interest
• D)Self-review

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Definitions:

Accounts Receivable

Funds that are due to a company from clients for products or services provided on credit.

Fees Earned

Revenue from providing services.

Purchases Journal

The purchases journal is a specialized accounting ledger that tracks all purchase transactions of a business, including inventory purchases on credit.

Supplies Account

An account in the general ledger that records the amount spent on supplies that are used in the operation of a business.