Assume the External Auditor of a Client Entity Also Served

question 46

Multiple Choice

Assume the external auditor of a client entity also served on the client's board of directors. What aspect of independence would be violated?

• A) The auditor may be exposed to an intimidation threat by the client
• B) The auditor is involved in a business relationship with the client
• C) The auditor serves in a management decision making position with the client
• D) All of these

---

Definitions:

Consumption Bundle

A combination of goods and services selected by a consumer for personal use.

T-Shirts

A basic item of clothing characterized by short sleeves, generally made of cotton, and lacking a collar.

Coffee

A beverage made from roasted coffee beans, which are the seeds of berries from the Coffea plant.

Optimal Consumption Bundle

The mix of products and services that optimizes satisfaction for a shopper within their financial limits.