Under Ordinary Circumstances,both the CFO and CEO of a Particular

question 32

Multiple Choice

Under ordinary circumstances,both the CFO and CEO of a particular company authorize and sign check disbursements exceeding $10,000.However,when the CEO of this audit client is unavailable for an extended period due to her travel schedule,the client's CPA co-signs checks that exceed $10,000 only after these checks first have been authorized and signed by the client's CFO.The CPA:

• A) Has created a management participation threat that impairs his independence
• B) Has created an undue influence threat that impairs his independence
• C) Has created an advocacy threat that impairs independence, unless appropriate safeguards are put into place
• D) Should be commended for assisting the client and has not affected his independence

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Definitions:

Empowerment

The process of increasing the capacity of individuals or groups to make choices and transform those choices into desired actions and outcomes.

Competency

It refers to the ability or skill to perform a task successfully or efficiently.

Positive Reinforcement

The addition of a rewarding stimulus following a desired behavior, encouraging its future occurrence.

Negative Reinforcement

A process in behavioral psychology where the removal of an undesirable outcome or stimulus increases the likelihood of a behavior being repeated.