If an Auditor of a Public Company Cannot Find Guidance

question 63

Multiple Choice

If an auditor of a public company cannot find guidance issued by the PCAOB on a particular audit matter, the auditor should generally seek guidance from which of the following sources?

• A)Statements on Auditing Standards
• B)Statements on Standards for Accounting and Review Services
• C)Regulations issued by the Securities and Exchange Commission
• D)The AICPA Code of Professional Conduct

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Definitions:

Subrogation

Subrogation is a legal right held by most insurance carriers to legally pursue a third party that caused an insurance loss to the insured, aiming to recover the amount of the claim paid to the insured.

Liability Provision

A term or clause within a contract or agreement that specifies the conditions under which one party is legally responsible to another, often including compensation for damages or losses.

Negligence

The failure to exercise appropriate and or ethical ruled care expected to be exercised amongst specified circumstances, leading to harm or damage.

Collision

An event where two or more objects come together with force, often used in the context of motor vehicles.