A public accounting firm should decline an offer to perform management advisory services if:
A) the firm audits the financial statements of a subsidiary of the prospective client.
B) recommendations to be made by the firm are to be subject to review by the client.
C) the proposed engagement is not accounting-related.
D) acceptance would require the firm to make management decisions for an audit client.

Question

Quizplus · Accepted Answer

A public accounting firm should decline an offer to perform management advisory services if acceptance would require the firm to make management decisions for an audit client. This would create a conflict of interest and could damage the independence and objectivity of the audit function. The other options (A, B, and C) do not necessarily require the firm to decline the offer to perform management advisory services, although they may require additional considerations or safeguards to maintain independence and objectivity.

A Public Accounting Firm Should Decline an Offer to Perform