Under which of the following circumstances is the principal-agent problem likely to be most serious.

(A) The auditor believes management’s estimates of the useful lives of key assets are unreasonable, but management refuses to change the estimates.

(B) Management does not provide reasonable justification for a change in accounting principles.

(C) The chief executive officer is unwilling to sign the management representation letter.

(D) The auditor believes, with evidence, that the chief executive officer has committed material fraud.

Answer rating: 100% (QA)

Option C is correct The chief executive officer is unwilling to sign the management r... View the full answer