1-A conflict of interest exists when:
A professional service or relationship creates a situation that might impair completion of the audit
A professional service or relationship creates a situation that might impair objective judgment
Professional skepticism fails to meet objective standards
All of the above
2-Common judgment traps include:
Group think, judgment triggers, and a rush to solve problems
Systems 1 thinking, cognitive dissonance, a rush to solve problems
Reacting to pressures, a rush to solve problems, and Systems 1 thinking
Group think, judgment triggers, and reacting to pressures
3-The Commercialism versus Professionalism case raises issues about:
The future of the accounting profession
Low-ball bidding for audit services
Pressures to compromise ethical values that exist in alternative practice structures
Opinion shopping
4-The statement made by Lynn Turner, former SEC chief accountant, "Are the auditors going to serve management, or are they going to serve the best interests of the investing public?", refers to concerns about:
Low-balling audit bids
Conflict between professionalism and commercialism
Fraud in financial statements
Opinion shopping
5-The SEC's position on independence can best be characterized as:
Banning the provision of all nonaudit services to audit clients
Proscribing certain business relationships with the client
Permitting certain financial interests with the client
Prohibiting auditors from providing tax advice to audit clients