Financial Statement Users Cannot Be Expected to Evaluate Audit Performance

question 93

Multiple Choice

Financial statement users cannot be expected to evaluate audit performance because they will not have the time or the competence to do so.In such a situation,public confidence in the quality of professional services is enhanced when there are

• A)only business majors hired to work as auditing students with public accounting firms.
• B)adequate controls at the public accounting firm to limit the amount of overtime worked.
• C)high standards of performance and conduct on the part of all practitioners.
• D)strict rules about the type of work that employees should complete on a daily basis.

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Definitions:

Variable Costs

Expenses that change in proportion to the activity of a business such as costs for raw materials or production labor.

Snow-clearing

The process of removing snow and ice from outdoor surfaces, primarily roads and pavements, to ensure safe passage for vehicles and pedestrians.

Perfectly Competitive

A market structure characterized by a large number of small firms, identical products sold by all firms, no barriers to entry or exit, and perfect information among buyers and sellers.

Marginal Cost

It refers to the cost change associated with producing an extra unit of a good or service, important in economic decision-making.