The Purpose of Establishing Quality Control Policies and Procedures to Accept

question 73

Multiple Choice

The purpose of establishing quality control policies and procedures to accept or continue a client relationship is to

• A) provide reasonable assurance that personnel are adequately trained to fulfill their responsibilities.
• B) monitor the risk factors concerning misstatements that arise from the misappropriation of assets.
• C) document objective criteria for the CPA firm's peer review.
• D) minimize the likelihood of associating with a client whose management may lack integrity.

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Definitions:

Financial Data Across Time

Refers to historical financial statistics, such as revenue, profits, and expenses, tracked over different periods to analyze trends and performance.

Vertical Analysis

A method of financial statement analysis in which each entry on a single financial statement is listed as a percentage of another item, typically used to assess relative changes over time within the statement.

Base Year

A specific year or period chosen as a reference point for financial or economic data analysis.

Percent Change

A mathematical calculation that indicates the degree of change over time, represented as a percentage.