A conflict of interest can occur for accounting firms when the firms both
A)provide auditing services and nonaudit consulting services.
B)provide nonaudit services and tax advice.
C)enter data and record data.
D)monitor data and underwrite securities.

Question

Quizplus · Accepted Answer

Providing both auditing services and nonaudit consulting services creates a conflict of interest because the accounting firm may be inclined to overlook potential issues in the auditing process in order to maintain a good relationship with the client and sell them additional consulting services. This compromise of objectivity and independence could lead to inaccurate financial reporting.

A Conflict of Interest Can Occur for Accounting Firms When