An Auditor Is Allowed to Have

question 13

Multiple Choice

An auditor is allowed to have:

• A) An indirect financial interest in a client as long as the interest constitutes an immaterial stake in the client
• B) An indirect financial interest in a client as long as the interest is immaterial to the auditor's net worth
• C) Any financial stake in a client as long as the interest is immaterial
• D) A direct interest in a client as long as safeguards on independence are satisfactory to the client

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Definitions:

Price Elasticity

A measure of how the quantity demanded or supplied of a good changes in response to a change in its price, indicating the sensitivity of consumers or producers to price changes.

Elastic

Describing a situation where the demand or supply for a product responds significantly to changes in price.

OPEC

The Organization of the Petroleum Exporting Countries, an intergovernmental organization of 13 oil-producing nations that collaborate to manage the supply and set the price of oil.

Elastic

Describes a situation where the quantity demanded or supplied of a good or service significantly changes in response to a change in price.