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SSSSS [86.1K]
3 years ago
10

Smith, CPA, is a partner of Johnson Accounting Firm. Johnson audited the books of Hometown Bank. Smith's independence would be i

mpaired under which of the following circumstances?
Business
1 answer:
borishaifa [10]3 years ago
3 0

Answer:

A. Smith is a Director of Hometown Bank

Explanation:

First, the multiple Options

a. Smith is a director of Hometown Bank.

b. Smith has a collateralized automobile loan with Hometown Bank.

c. Smith had an account with Hometown Bank 2 years ago.

d. Smith and a Hometown Bank board member belong to the same church.

Basically, there are 5 characteristics of an auditor whose responsibility is access the financial statement of an organisation and give a true and fair report on the state of the business. One of these characteristics is Independence and Objectivity.

When there are potential risks to the ability of the auditor to give a true and fair view of the audited books, the we say the auditor's independence is impaired.

An auditor's independence is impaired as a result of business relationship with clients. This includes any form of business association with client as manager, employee, director among others.

Based on these definitions, Smith as a director of Hometown Bank and a partner of Johnson Accounting firm risks the impairment of his independence because of the business relationship of being a Director with the client.

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Explanation

In any normal distribution, the median and mean are the same value.

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The proof is as follows:

If mean > median was the case, then the distribution would be skewed to the right (ie positively skewed). The right tail is pulled longer than the left tail. But this would contradict the symmetrical nature of the normal distribution. So mean > median must not be the case.

If mean < median, then the distribution would be skewed to the left (negatively skewed). Visually this pulls the left tail longer than the right tail. Like in the previous paragraph, this contradicts the symmetrical nature of the normal distribution. So mean < median must not be the case.

Since mean > median cannot be true, and neither can mean < median, this must indicate mean = median.

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So in short, any symmetrical distribution always has mean = median and they are at the very center of the distribution.

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Which of the following ways of investing/saving is the most liquid?
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A firm practicing unrelated diversification can make better capital allocations to its subsidiary businesses than the external c
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Unrelated Diversification is regarded as a diversification which takes place when a company adds an unrelated product to its business. For example, when an television manufacturer enters into a clothing business.

A firm practicing unrelated diversification can make better capital allocations to its subsidiary businesses than the external capital market can for all the following reasons except when the firm can acquire other firms with innovative products instead of allocating capital to research and development.

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