A CPA Firm Is Comprised of 100 Audit Partners

question 35

Multiple Choice

A CPA firm is comprised of 100 audit partners.Three of these partners own stock in one of the CPA firm's audit clients,with each such partner owning 2% of the outstanding shares in this client.Does this CPA firm retain the independence to audit this client?

• A) Yes, as long as none participate in the audit as the primary or concurring partner
• B) Yes, as long as none render non-audit services to this client
• C) Yes, as long as none is a "covered member' with respect to this client
• D) No

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Definitions:

Z Test

This method tests if two populations' means differ, assuming known variances and a large sample size.

Group 1

A designation for the first cohort or category in an experimental or observational study, often used as a reference or control group.

Multinomial Population

A population in a statistical model where outcomes can fall into three or more categories.

Normal Population

A population in which the data follows a normal distribution, characterized by a bell-shaped curve.