Which of the Following Factors Most Likely Would Cause a CPA

question 29

Multiple Choice

Which of the following factors most likely would cause a CPA not to accept a new audit engagement?

• A)The prospective client's unwillingness to permit inquiry of its legal counsel.
• B)The inability to review the predecessor auditor's documentation.
• C)The CPA's lack of understanding of the prospective client's operations and industry.
• D)Indications that management has not investigated employees in key positions before hiring them.

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Definitions:

Specific Identification

A method for inventory costing and valuation that tracks the cost of individual items or batches of items.

First-In, First-Out

An inventory valuation method where goods purchased or produced first are sold or used first.

Inventory Method

Inventory methods are accounting approaches used to value and manage a company's inventory, including techniques like FIFO (First In, First Out) and LIFO (Last In, First Out).

Most Recent Costs

refers to the latest expenses incurred, often used in inventory valuation to assume that the costs of the most recently acquired items are the first to be assigned.