The Fourth PCAOB Standard of Reporting Requires an Auditor to Render

question 61

Multiple Choice

The fourth PCAOB standard of reporting requires an auditor to render a report whenever an auditor's name is associated with financial statements.The overall purpose of the fourth standard of reporting is to require that reports

• A) State that the examination of financial statements has been conducted in accordance with generally accepted auditing standards.
• B) Indicate the character of the auditor's examination and the degree of responsibility assumed by the auditor.
• C) Imply that the auditor is independent in fact as well as in appearance with respect to the financial statements under examination.
• D) Express whether the accounting principles used in preparing the financial statements have been applied consistently in the period under examination.

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Definitions:

Social Security Tax

A mandatory payroll tax collected to fund the Social Security program, providing retirement, disability, and survivors' benefits.

Medicare Tax

A federal tax that funds the Medicare program, which is withheld from an employee's paycheck and also matched by the employer.

FICA Tax

A federal tax in the United States that funds Social Security and Medicare, contributed by both employees and employers.

Tax Withheld

The portion of an employee's income that an employer sends directly to the government as a payment of income taxes.