James,one of the partners of James & Fiduciary Duty Co.,the auditors of a major Canadian corporation (Canco),is one of the major shareholders of Canco.This situation could result in a
A)violation of the statute.
B)breach of duty.
C)conflict of interest.
D)fiduciary duty.
E)breach of contract.

Question

Quizplus · Accepted Answer

James being a major shareholder of Canco creates a conflict of interest for him as an auditor of Canco. He may be inclined to prioritize his personal interests as a shareholder over his duty as an auditor to provide a fair and objective assessment of Canco's financial statements. This goes against the fundamental principle of auditor independence and creates a potential risk for the credibility of Canco's financial reporting.

James,one of the Partners of James & Fiduciary Duty Co