In Auditing a Publicly Held Company, an Auditor Must Follow

question 19

Multiple Choice

In auditing a publicly held company, an auditor must follow the professional standards established by all of the following except:

• A)the AICPA's Auditing Standards Board.
• B)the SEC Independence Rules.
• C)the PCAOB Code of Professional Conduct.
• D)the PCAOB Auditing Standards.

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Definitions:

Allocation Base A

An allocation base is a measure or quantity, such as machine hours or labor costs, used to assign indirect costs to different products or services.

Allocation Base B

A criterion or standard used to distribute overhead costs among various cost objects.

Step-down Method

A cost allocation method used in accounting to distribute overhead costs to various cost objects based on a hierarchical sequence of allocation bases.

Custodial Services

These are services related to the maintenance and cleaning of buildings and facilities.