Which of the Following Factors Most Likely Would Lead a CPA

question 395

Multiple Choice

Which of the following factors most likely would lead a CPA to conclude that a potential audit engagement should be rejected?

• A) The details of most recorded transactions are not available after a specified period of time.
• B) Internal control activities requiring the segregation of duties are subject to management override.
• C) It is unlikely that sufficient appropriate evidence is available to support an opinion on the financial statements.
• D) Management has a reputation for consulting with several accounting firms about significant accounting issues.

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Definitions:

Rate of Return

The upward or downward movement in the value of an investment across a chosen timeframe, expressed as a percentage of the investment's initial investment.

Margin

Describes securities purchased with money borrowed from a broker. Current maximum allowed margin on stock purchases is 50%.

Sell the Stock

An action where an investor disposes of their ownership in a corporation through the sale of its shares.

Maintenance Margin

The minimum equity amount that must be maintained in a margin account after a purchase has been made, to cover the risk of the investment.