Pursuant to Federal Securities Laws, an Audit Must Be Performed

question 61

True/False

Pursuant to federal securities laws, an audit must be performed by a CPA who works closely with the company in the capacity of a chief executive officer (CEO)or a chief financial officer (CFO).

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Definitions:

Useful Service Life

The estimated period over which a fixed asset is expected to be usable by the company.

Straight-line Method

A depreciation method that allocates an equal amount of depreciation each year over the useful life of an asset.

Depreciable Assets

Assets whose cost is allocated over their useful lives due to usage, wear and tear, or obsolescence.

Annual Depreciation

The portion of an asset's cost that is allocated as an expense each year over its useful life through the process of depreciation.