The AICPA Principles and the Auditing Standards Should Be Viewed

question 44

Multiple Choice

The AICPA principles and the auditing standards should be viewed by practitioners as

• A) ideals to work towards, but which are not achievable.
• B) maximum standards that denote excellent work.
• C) minimum standards of performance that must be achieved on each audit engagement.
• D) benchmarks to be used on all audits, reviews, and compilations.

---

Definitions:

Book Value

The net value of an asset or liability recorded on the balance sheet, often different than its fair market value.

Building Account

An account used to track the costs associated with the construction or improvement of a building until the project is completed and the asset is ready for use.

Adjusted Trial Balances

An internal document that lists all accounts and their balances after adjustments are made for errors, accruals, and deferrals, used for preparing financial statements.

Adjusting Entries

Financial records made upon the completion of an accounting cycle to allocate gains and deductions to the actual period in which they occurred.