During the Course of Working as an External Auditor,you Discovered

question 21

Multiple Choice

During the course of working as an external auditor,you discovered that your audit client is going to build a new luxury ski resort in rural Utah.As a result,you purchased a vacation home near that resort in the expectation that housing prices will benefit from the announcement of a luxury resort being built nearby.Your action:

• A) Was unethical only if it precluded your client from pursuing this opportunity to earn a profit on nearby real estate
• B) Was unethical even though it caused no harm to your client
• C) Was ethical because the insider trading laws only concern purchases of securities
• D) Was ethical because your action was expressly allowed by the IFAC code of conduct

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Definitions:

Average Revenue

Total revenue from the sale of a product divided by the quantity of the product sold (demanded); equal to the price at which the product is sold when all units of the product are sold at the same price.

Elasticity Coefficient

A numerical value that measures the responsiveness of the quantity demanded or supplied of a good to a change in its price or other factors.

Marginal Revenue

The additional income that is generated by selling one more unit of a product or service.

Nondiscriminating Monopolist

A monopolist that charges all consumers the same price for its product or service.