The 'Safeguards' against threats to independence may be: MCQ with Answer and Explanation

The 'Safeguards' against threats to independence may be:
A. Created by the profession, legislation, or within the client's organisation
B. None
C. Only internal
D. Only regulatory
Answer: Option A
Solution (By JKSSB Mock Tests)
Safeguards are measures that eliminate or reduce threats to an acceptable level.

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Practice More Accountancy and Book Keeping Questions

Question #1
S1: In standard costing, the 'Labour Efficiency Variance' is calculated as (Standard Hours for Actual Production - Actual Hours Worked) x Standard Rate. S2: If the actual hours worked are less than the standard hours, the variance is favorable. Which statement(s) is/are correct?
A. Both S1 and S2
B. Neither S1 nor S2
C. S2 only
D. S1 only

Correct Answer: Option A


Explanation:
Both statements are correct. The formula for Labour Efficiency Variance is (SH - AH) x SR. If AH < SH, the result is positive, indicating a favorable variance (less time taken than standard).

Question #2
A: The Public Account of India includes Provident Funds. R: The government can withdraw money from the Public Account without parliamentary approval. Choose the correct option.
A. A is true but R is false
B. Both A and R are true and R is the correct explanation of A
C. Both A and R are true but R is NOT the correct explanation of A
D. A is false but R is true

Correct Answer: Option B


Explanation:
The Public Account holds money like Provident Funds where the government acts as a banker. Since these funds belong to others, the government can make payments from this account without parliamentary approval. R correctly explains the nature of the account.

Question #3
The 'Financial Reporting' under Indian GAAP for non-corporate entities is governed by:
A. Accounting Standards (AS) issued by ICAI
B. IFRS
C. Companies Act only
D. Ind AS only

Correct Answer: Option A


Explanation:
Non-company entities follow AS issued by ICAI.