An Auditor May Not Perform an Audit Unless Threats to Independence

question 24

Multiple Choice

An auditor may not perform an audit unless threats to independence are:

• A) Agreed to by the audit client
• B) Reduced to an acceptable level
• C) Nonexistent
• D) Eliminated entirely by the client prior to commencement of the audit

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Definitions:

Private Cost

The costs directly incurred by those who are producing or consuming goods or services.

Marginal Social Benefit

The additional gain to society as a whole from an extra unit of production.

Marginal Social Cost

The cost to society of producing an additional unit of a good or service, including both the private costs and any external costs.

Marginal Social Benefits

The extra advantage to the entire community from using an additional unit of a product or service.