Which of the Following Statements Is True When the CPA

question 56

Multiple Choice

Which of the following statements is true when the CPA has been engaged to perform an audit of financial statements?

• A) The CPA firm is engaged and paid by the client; therefore, the firm has primary responsibility to be an advocate for the client.
• B) The CPA firm is engaged and paid by the client, but the primary beneficiaries of the audit are those who rely on the financial statements.
• C) Should a situation arise where there is no convincing authoritative standard available, and there is a choice of actions which could impact a client's financial statements, the CPA is free to endorse the choice which is in the investors' interests.
• D) The CPA firm has primary responsibility to the FASB.

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Definitions:

Success

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A range of values, derived from sample statistics, that is likely to contain the value of an unknown population parameter with a certain degree of confidence.

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Regression Analysis

A statistical method used to examine the relationship between two or more variables, typically to forecast one variable based on the others.