QUESTION 2 The auditor must be independent of the audit client unless O a. Both parties agree that the independence issue is not a problem. Ob. The lack of independence is insignificant. O c. None of the above-the auditor cannot lack independence. Od. The lack of independence does not influence his or her professional judgment. QUESTION 3 In the context of agency theory, information asymmetry refers to the idea that O . Information can vary in its relevance. O b. Management likely will not act in the best interests of the absentee owners. Management has more information about the entity's true financial position than do the absentee owners. . Od Information can vary in its reliability. QUESTION 4 An auditor would issue an adverse opinion if An immaterial misstatement is present. Ob A qualified opinion cannot be given because the auditor is not qualified to do so. OC. The statements taken as a whole do not fairly present the financial condition and results of operations of the company. Od The auditor encounters adverse attitudes toward the auditor on the part of client management QUESTION 5 The basic purpose of a financial statement audit is to O a. Provide assurance regarding whether the client's financial statements are fairly stated. O b. Assure the consistent application of correct accounting procedures. O Detect fraud. O d. Examine individual transactions so that the auditor may certify as to their validity