- 1 Marks
AAA – L3 – SA – Q3.2 – Conflict of Interest
Incorrect statement about conflict of interest.
Question
Which of the following statements is INCORRECT?
A A conflict of interest between two clients may be resolved for the auditor by segregating certain responsibilities and duties.
B In taking on a new client, an audit firm shall consider the potential conflict of interests with providing service to an existing client.
C In a takeover bid, an audit firm can act as the sole adviser to both companies involved in the bid.
D If a potential conflict of interest exists between a potential new client and an existing client, the audit firm may need to either decline the engagement with the new client or withdraw from the engagement from the existing client.
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