Which of the Following Statements Is True When the CPA

question 53

Multiple Choice

Which of the following statements is True when the CPA has been engaged to perform an audit of financial statements?

• A)The CPA firm is engaged and paid by the client;therefore,the firm has primary responsibility to be an advocate for the client.
• B)The CPA firm is engaged and paid by the client,but the primary beneficiaries of the audit are those who rely on the financial statements.
• C)Should a situation arise where there is no convincing authoritative standard available,and there is a choice of actions which could impact a client's financial statements,the CPA is free to endorse the choice which is in the investors' interests.
• D)The CPA firm has primary responsibility to the FASB.

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Definitions:

Actual Activity

The real, measured amount of work performed or the level of production achieved over a specified period of time.

Customer Service Department

A division within a company that handles inquiries, resolves issues, and maintains relationships with customers.

Variable Costs

Expenses that vary directly with the level of production or sales volume, such as raw materials and direct labor.

Fixed Costs

Expenses that do not change in total regardless of the level of production or sales volume.