A CPA Issued a Standard Unqualified Audit Report on the Financial

question 11

Multiple Choice

A CPA issued a standard unqualified audit report on the financial statements of a client that the CPA knew was in the process of obtaining a loan.In a suit by the bank issuing the loan,the CPA's best defense would be that the:

• A)Audit complied with generally accepted auditing standards.
• B)Client was aware of the misstatements.
• C)Bank was not the CPA's client.
• D)Bank's identity was known to the CPA prior to completion of the audit.

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Definitions:

Payoff

The return or reward received from an investment or action, often analyzed in game theory and economics.

Proportion

A portion, fraction, or quantity that is seen in contrast to the entire entity.

Equilibrium

A condition or state where all acting influences are balanced, particularly in a market when supply equals demand.

Penalty Kick

A penalty kick in economics might refer metaphorically to an opportunity to score or gain significantly with little opposition, though it's primarily a sports term.