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CPAs May Provide Bookkeeping Services to Their Private Company Audit

question 149

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CPAs may provide bookkeeping services to their private company audit clients, but there are a number of conditions that must be met if the auditor is to maintain independence. Which of the following conditions is not necessary?


Definitions:

Worker

An individual who performs tasks or services for compensation; an employee.

Variable Cost

Costs that change in proportion to the activity or volume of output in production, such as raw materials and direct labor costs.

Fixed Cost

Costs that do not vary with the level of output or sales, such as rent, salaries, and insurance.

Marginal Cost

The amount of money spent to manufacture one additional unit of a product or service.

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