Which of the Following Procedures Does a CPA Normally Perform

question 1047

Multiple Choice

Which of the following procedures does a CPA normally perform first in a review engagement in accordance with Statements on Standards for Accounting and Review Services (SSARS) ?

• A) Inquiry regarding the client's principles and practices and the method of applying them.
• B) Inquiry concerning the effectiveness of the client's system of internal control.
• C) Inquiry to identify transactions between related parties and management.
• D) Inquiry of the client's professional advisors, including bankers, insurance agents, and consultants.

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Definitions:

Total Payroll Tax

The combined amount of all governmental taxes that an employer is required to withhold and/or pay on behalf of their employees, including federal, state, and local taxes.

Social Security Taxes

Taxes levied on both employers and employees to fund the Social Security program, used for providing retirement, disability, and survivor benefits.

Medicare Taxes

Taxes withheld from employees' paychecks and matched by employers to fund the Medicare program.

Vacation Pay Payable

A liability account representing the amount of vacation pay owed to employees that has not yet been paid.