A Small CPA Firm Provides Audit Services to a Large

question 36

Multiple Choice

A small CPA firm provides audit services to a large local company.Almost eighty percent of the CPA firm's revenues come from this client.Which statement is most likely to be true?

• A)Appearance of independence may be lacking.
• B)The small CPA firm does not have the proficiency to perform a larger audit.
• C)The situation is satisfactory if the auditor exercises due skeptical negative assurance care in the audit.
• D)The auditor should provide an "emphasis of a matter paragraph" to his/her audit report adequately disclosing this information and then it may issue an unqualified opinion.