A CPA Has Been Hired to Audit a Bank That

question 9

Multiple Choice

A CPA has been hired to audit a bank that is regulated by the federal banking authorities.This audit will be submitted by the bank to numerous readers,including federal regulators.The CPA's audit agreement with the bank provides that the bank will "reimburse and indemnify it for all losses it incurs if the bank's financial statements were prepared by the bank in a manner that was misleading or fraudulent." This provision:

• A) Definitely is a violation of the Acts Discreditable Rule
• B) Definitely is not a violation of the Acts Discreditable Rule because it provides for a limitation on the CPA's liability only in cases where the client solely is at fault
• C) Definitely is not a violation of the Acts Discreditable Rule because the CPA firm's agreement is reasonable and appropriate
• D) Potentially is a violation of the Acts Discreditable Rule

---

Definitions:

Aquathermia Pad

A therapeutic device that uses water and temperature regulation to provide heat or cold therapy to specific parts of the body.

Hypothermia Blanket

A special blanket used in medical settings to reduce a patient's body temperature, often for therapeutic reasons.

Inflammation

A biological response of body tissues to harmful stimuli, such as pathogens, damaged cells, or irritants, characterized by redness, swelling, heat, and sometimes pain and loss of function.

Musculoskeletal System

The organ system that enables humans and animals to move using the muscular and skeletal systems, including bones, muscles, cartilage, tendons, ligaments, and joints.