Interpretations to the Rules of Conduct Permit a CPA Firm

question 47

Multiple Choice

Interpretations to the Rules of Conduct permit a CPA firm to do both bookkeeping and auditing for the same private company client if three criteria are met. Which of the following is not one of those criteria?

• A) The client must accept full responsibility for the financial statements.
• B) The client is required to file an annual report, including audited financial statements, with the Securities and Exchange Commission.
• C) The CPA must not assume the role of employee or of manager.
• D) The CPA must follow applicable auditing standards.

---

Definitions:

Boundaryless Structure

An organizational structure that is characterized by the elimination of traditional barriers between departments and external environment to foster a more flexible and collaborative work setting.

Team Structures

The organizational design and composition of teams, including roles, responsibilities, and relationships among team members.

Temporary Teams

Teams formed for a specific project or objective with a limited time frame.

Organic Farming

A method of farming that relies on natural substances and processes to produce crops, avoiding synthetic pesticides and fertilizers.