For Listed Clients,the Audit Committee Should Approve Both the Appointment

question 49

Multiple Choice

For listed clients,the audit committee should approve both the appointment of the auditor and

• A)all services that the PA firm provides to the client.
• B)an engagement that might affect the appearance of independence,such as design of control systems.
• C)any services that are provided for senior management.
• D)the material that is included in the management letter by the PA firm.

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Definitions:

Book Value per Share

A measure of the net asset value of a company allocated to each outstanding share.

Return on Total Assets

A financial ratio that measures the net income produced by total assets during a period by comparing net income to the average total assets.

Net Profit Margin Percentage

A profitability metric that calculates the percentage of net income derived from revenue, indicating how much of each dollar in revenue results in profit.

Return on Equity

A measure of financial performance calculated by dividing net income by shareholders' equity, indicating how effectively management is using a company's assets to create profits.