Which of the Following Is True If an Auditor Performs

question 80

Multiple Choice

Which of the following is true if an auditor performs nonaudit services for a government entity?

• A) The scope of the audit must be reduced so that the auditor does not audit the area for which the nonaudit work was performed.
• B) The auditor is prohibited from providing nonaudit work in areas directly related to the production of accounting information.
• C) The senior members of the government entity must document their review of the nonaudit service and indicate why it is appropriate for the auditors to perform this service.
• D) The scope of the audit cannot be reduced because the nonaudit work was performed by the public accounting firm.

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Definitions:

Tax Per Unit

A tax that is levied on a per unit basis, meaning for every unit of a good produced or sold, a certain amount of tax is paid.

Deadweight Loss

A reduction in economic effectiveness that happens when a good or service does not reach, or cannot reach, its equilibrium state.

Tax Per Unit

Tax per unit is a fixed amount of tax applied to a product or service, regardless of its price, which directly affects the supply curve by increasing production costs.

Tax Levied

The process of imposing a tax by a governing authority on the citizens and organizations.