Which of the Following Is a True Statement Regarding Auditing

question 26

Multiple Choice

Which of the following is a true statement regarding auditing standards?

• A) Prior to the passage of Sarbanes-Oxley, the FASB established auditing principles for U.S. public companies.
• B) PCAOB auditing standards are applicable to entities outside the U.S.
• C) There are no similarities between PCAOB standards and International Standards on Auditing.
• D) The Auditing Standards Board has revised most of its standards to converge with the international standards.

---

Definitions:

Depreciation

A reduction in the value of an asset over time, due to wear and tear, age, or obsolescence.

Net Investment

The total spending on new capital assets minus the depreciation on existing assets, indicating the growth in a company’s or economy's capital stock.

Depreciation

The method by which a company allocates an asset's cost over its useful life, reflecting the consumption of the asset's economic benefits.

Disposable Income

The reserve of funds households possess for spending and saving after income tax payments.