The Canadian Institute of Chartered Accountants (CICA) has taken a principles-based approach to auditor independence, whereas the Federation des Experts Comptables Europeens (FEE) has taken a conceptual approach. What is the difference?
A. The principles-based approach has been effective, but the conceptual approach has not.
B. The principles-based approach offers more flexibility in compliance than the conceptual approach does.
C. The principles-based approach gives specific rules and prohibitions that must be followed, but the conceptual approach asks auditors to focus on the aim of independence rather than rules.
D. The conceptual approach is only theoretical and hasn’t yet been applied, whereas the principles-based approach is currently in practice.
Answer:C
The Canadian Institute of Chartered Accountants (CICA) has taken a principles-based approach to auditor independence, whereas the Federation des Experts Comptables Europeens (FEE) has taken a conceptual approach. What is the difference?
A. The principles-based approach has been effective, but the conceptual approach has not. B. The principles-based approach offers more flexibility in compliance than the conceptual approach does. C. The principles-based approach gives specific rules and prohibitions that must be followed, but the conceptual approach asks auditors to focus on the aim of independence rather than rules. D. The conceptual approach is only theoretical and hasn’t yet been applied, whereas the principles-based approach is currently in practice.