Some independence rules apply to all assurance engagements, while others apply only to a listed entity. For the purposes of assessing the independence rules, a listed entity is defined as
A) an organization with share capital exceeding $10 million that has public accountability.
B) an entity whose debt or shares is listed on a stock exchange, with market capitalization and total assets greater than $10 million.
C) any organization that has shares or debt listed on a stock exchange.
D) an organization that has shares or debt listed on a stock exchange, and that has redeemed shares.

Question

Quizplus · Accepted Answer

The definition of a listed entity is an entity whose debt or shares is listed on a stock exchange, with market capitalization and total assets greater than $10 million. Choice A may be too specific as it only mentions organizations with share capital exceeding $10 million. Choice C is too broad as it encompasses any organization with shares or debt listed on a stock exchange, regardless of their size. Choice D includes an additional criteria of having redeemed shares, which is not relevant to the definition of a listed entity.

Some Independence Rules Apply to All Assurance Engagements, While Others