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CMA Intermediate · Business Laws and Ethics · Operational and Financial Control

Section 144 prohibits an auditor from rendering the listed services to the company and also to which other entities?

The prohibition covers services to the company as well as its holding company or subsidiary company. Section 144 expressly names these entities, so an auditor cannot avoid the bar by serving the parent or a subsidiary instead of the audited company.

  1. AOnly to the company itself
  2. BIts holding company or subsidiary companyCorrect
  3. COnly its associate companies
  4. DOnly its joint venture partners

Explanation

The section bars the listed services whether rendered directly or indirectly to the company, or its holding company or subsidiary company. Associate companies and joint ventures are not named in the text, so options 3 and 4 are wrong. Option 1 is too narrow.

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