An Independent CPA Is Conducting an Audit of an Entity

question 54

Multiple Choice

An independent CPA is conducting an audit of an entity that is subject to the GAO audit standards, but is not subject to the OMB audit standards. While conducting the audit, the CPA found that the entity had violated a law that had a large, but not material, potential penalty associated with such violation. There was no accrual for the potential penalty or disclosure of the violation. What action(s) must the CPA take with regard to this violation?

• A) Nothing, since the financial statements are not materially misstated.
• B) Must issue an adverse opinion if the financial statements are not changed to reflect the violation.
• C) Must issue a report that details the violation and the potential dollar effect.
• D) Must report the incident to the local law enforcement agency.

Understand the role and functions of the Federal Reserve System.

Identify the stages of the adult life and financial needs cycle.

Recognize the components of financial planning including obtaining, saving, sharing, protecting, and borrowing.

Comprehend the concepts of liquidity and how it affects financial decisions.

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Definitions:

Primary Data

Data collected firsthand for a specific research purpose, through methods such as surveys, interviews, or experiments.

Syndicated Data

Data available for a fee from commercial research firms such as Information Resources Inc. (IRI), National Purchase Diary Panel, and Nielsen.

Sample

A group of customers who represent the customers of interest in a research study.

Marketing Research

Marketing Research involves gathering, analyzing, and interpreting information to aid in making informed marketing decisions.